##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 
 FORM 20-F
 
 (Mark One)
 o
    
    REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR 12(g) OF THE SECURITIES EXCHANGE
ACT OF 1934
 OR
 þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the fiscal year ended March 31, 2011
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
 For the transition period from  to
 OR
 o
    
    SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT
OF 1934
 Date of event requiring this shell company report
 Commission file number: 001-34923
 
 LE GAGA HOLDINGS LIMITED
 (Exact Name of Registrant as Specified in Its Charter)
 
 N/A
(Translation of Registrants Name Into English)
 Cayman Islands
(Jurisdiction of Incorporation or Organization)

Unit 1105, The Metropolis Tower
10 Metropolis Drive
Hung Hom, Kowloon
Hong Kong
(Address of Principal Executive Offices)
 Auke Cnossen, Chief Financial Officer
Unit 1105, The Metropolis Tower
10 Metropolis Drive
Hung Hom, Kowloon
Hong Kong
Tel: +852-3162-8585
Fax: +852-3167-7227
E-mail: ir@legaga.com.hk
(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)
 
 Securities registered or to be registered pursuant to Section 12(b) of the Act:
 Title of Each Class
    
    Name of Each Exchange on Which RegisteredOrdinary shares, par value US$0.01 per share*
    
    The NASDAQ Stock Market LLCAmerican Depositary Shares, each representing 50 ordinary

shares
    
    (The NASDAQ Global Select Market)
 *
    
    Not for trading, but only in connection with the listing on The
NASDAQ Global Select Market of American depositary shares, each
representing 50 ordinary shares Securities registered or to be registered pursuant to Section 12(g) of the Act:
 None
(Title of Class)
 Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:
 None
(Title of Class)
 
  2,293,591,000 ordinary shares, par value $0.01 per share, as of March 31, 2011.
 o þ
 o þ
 þ o
 o o
  Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer þ
  o þ o
  o o
 o þ
  o o




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##### 



TABLE OF CONTENTS
 Introduction
    
    
    3Forward-Looking Statements
    
    
    3Part I
    
    
    4Item 1. Identity of Directors, Senior Management and Advisers
    
    
    4Item 2. Offer Statistics and Expected Timetable
    
    
    4Item 3. Key Information
    
    
    4Item 4. Information on the Company
    
    
    23Item 5. Operating and Financial Review and Prospects
    
    
    37Item 6. Directors, Senior Management and Employees
    
    
    57Item 7. Major Shareholders and Related Party Transactions
    
    
    65Item 8. Financial Information
    
    
    67Item 9. The Offer and Listing
    
    
    68Item 10. Additional Information
    
    
    68Item 11. Quantitative and Qualitative Disclosures about Market Risk
    
    
    75Item 12. Description of Securities Other than Equity Securities
    
    
    77Part II
    
    
    78Item 13. Defaults, Dividend Arrearages and Delinquencies
    
    
    78Item 14. Material Modifications to the Rights of Security Holders and Use of Proceeds
    
    
    78Item 15. Controls and Procedures
    
    
    79Item 16A. Audit Committee Financial Expert
    
    
    80Item 16B. Code of Ethics
    
    
    80Item 16C. Principal Accountant Fees and Services
    
    
    80Item 16D. Exemptions from the Listing Standards for Audit Committees
    
    
    81Item 16E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers
    
    
    81Item 16F. Change in Registrants Certifying Accountant
    
    
    81Item 16G. Corporate Governance
    
    
    81Part III
    
    
    81Item 17. Financial Statements
    
    
    81Item 18. Financial Statements
    
    
    81Item 19. Exhibits
    
    
    82EX-10.13EX-12.1EX-12.2EX-13.1EX-13.2EX-15.1EX-15.2
   2




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##### Table of Contents



Introduction
  
    
    We, us, our company, and our refer to Le Gaga Holdings Limited, any entity
carrying on Le Gagas current business prior to the restructuring transactions through
which Le Gaga became our listing vehicle, and their respective subsidiaries;
 
    
    China or PRC refers to the Peoples Republic of China, excluding Taiwan, Hong Kong
and Macau;
 
    
    ADSs refers to American Depositary Shares, each representing 50 of our ordinary
 shares;
 
    
    Renminbi or RMB refers to the legal currency of China; and
 
    
    $ or U.S. dollars refers to the legal currency of the United States.
     
 Forward-Looking Statements
   
    
    our anticipated growth strategies, including enhancing our greenhouse coverage,
increasing our production scale, strengthening our sales, marketing and distribution
efforts, and expanding our research and development capability;
 
    
    our future business development, results of operations and financial condition;
 
    
    weather conditions that affect the production, transportation, storage and export of
fresh produce;
 
    
    trends and competition in the fresh vegetable market;
 
    
    future changes in laws or regulations affecting our business; and
 
    
    changes in general economic and business conditions in China.
   3




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##### Table of Contents



Part I
 
 Item 1.
    
    Identity of Directors, Senior Management and Advisers
  
 Item 2.
    
    Offer Statistics and Expected Timetable
  
 Item 3.
    
    Key Information
 A. Selected Financial Data
   Year Ended March 31,2008
    
    
    2009
    
    
    2010
    
    
    2011RMB
    
    
    RMB
    
    
    RMB
    
    
    RMB
    
    
    $(In thousands, except per share and per ADS data)Consolidated Income Statement Data:Revenue
    
    
    153,559
    
    
    
    198,995
    
    
    
    280,512
    
    
    
    406,772
    
    
    
    62,119Cost of inventories sold
    
    
    (129,228
    )
    
    
    (174,288
    )
    
    
    (238,277
    )
    
    
    (357,211
    )
    
    
    (54,550
    )Changes in fair value less costs to
sell related to:Crops harvested during the
year
    
    
    52,689
    
    
    
    80,795
    
    
    
    119,009
    
    
    
    186,183
    
    
    
    28,432Growing crops on the farmland at
the year end
    
    
    17,558
    
    
    
    16,548
    
    
    
    33,734
    
    
    
    55,713
    
    
    
    8,508Total changes in fair value less costs
to sell of biological assets
    
    
    70,247
    
    
    
    97,343
    
    
    
    152,743
    
    
    
    241,896
    
    
    
    36,940Operating expenses
    
    
    (53,704
    )
    
    
    (61,983
    )
    
    
    (83,278
    )
    
    
    (156,219
    )
    
    
    (23,857
    )Results from operating activities
    
    
    40,874
    
    
    
    60,067
    
    
    
    111,700
    
    
    
    135,238
    
    
    
    20,652Profit for the year
    
    
    38,445
    
    
    
    60,413
    
    
    
    110,202
    
    
    
    133,375
    
    
    
    20,368Earnings per ordinary/preferred share (in
cents)(1)Basic
    
    
    2.85
    
    
    
    3.61
    
    
    
    6.52
    
    
    
    6.68
    
    
    
    1.02Diluted
    
    
    2.85
    
    
    
    3.57
    
    
    
    6.43
    
    
    
    6.46
    
    
    
    0.99Earnings per ADS (in cents)Basic
    
    
    142.50
    
    
    
    180.50
    
    
    
    326.00
    
    
    
    334.0
    
    
    
    51.01Diluted
    
    
    142.50
    
    
    
    178.50
    
    
    
    321.50
    
    
    
    323.0
    
    
    
    49.33Other Financial Data:Adjusted cost of inventories sold(2)
    
    
    (63,602
    )
    
    
    (75,661
    )
    
    
    (102,565
    )
    
    
    (138,863
    )
    
    
    (21,206
    )Adjusted profit for the
year(3)
    
    
    38,986
    
    
    
    64,837
    
    
    
    98,944
    
    
    
    151,828
    
    
    
    23,186Adjusted EBITDA(4)
    
    
    52,849
    
    
    
    89,042
    
    
    
    135,603
    
    
    
    201,200
    
    
    
    30,726
  4




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Year Ended March 31,2008
    
    
    2009
    
    
    2010
    
    
    2011RMB
    
    
    RMB
    
    
    RMB
    
    
    RMB
    
    
    $(In thousands)Consolidated Balance Sheet
Data:Cash
    
    
    85,360
    
    
    
    107,939
    
    
    
    139,207
    
    
    
    598,722
    
    
    
    91,432Total non-current assets
    
    
    167,594
    
    
    
    285,232
    
    
    
    414,525
    
    
    
    664,993
    
    
    
    101,552Total current assets
    
    
    248,027
    
    
    
    155,392
    
    
    
    223,929
    
    
    
    739,992
    
    
    
    113,005Total assets
    
    
    415,621
    
    
    
    440,624
    
    
    
    638,454
    
    
    
    1,404,985
    
    
    
    214,557Total non-current liabilities
    
    
    
    
    
    
    1,000
    
    
    
    35,700
    
    
    
    78,835
    
    
    
    12,039Total current liabilities
    
    
    49,550
    
    
    
    14,958
    
    
    
    22,710
    
    
    
    46,403
    
    
    
    7,086Total liabilities
    
    
    49,550
    
    
    
    15,958
    
    
    
    58,410
    
    
    
    125,238
    
    
    
    19,125Total equity
    
    
    366,071
    
    
    
    424,666
    
    
    
    580,044
    
    
    
    1,279,747
    
    
    
    195,432
 As of March 31,2008
    
    
    2009
    
    
    2010
    
    
    2011Selected Operating Data:Total arable land area(5)
    
    17,103 mu(1,140 hectares)
    
    
    16,525 mu(1,102 hectares)
    
    
    
    18,850(1,257 hectares)
    
    
    
    20,402(1,360 hectares)Total greenhouse land area
    
    2,668 mu(178 hectares)
    
    3,117 mu(208 hectares)
    
    4,420 mu(295 hectares)
    
    6,779 mu(452 hectares)Greenhouse land area as a
percentage of total arable
land area
    
    
    15.6%
    
    
    
    18.9%
    
    
    
    23.4%
    
    
    
    33.2%
  5




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Year Ended March 31,2008
    
    
    2009
    
    
    2010
    
    
    2011Total production output
    
    
    57,085tonnes
    
    
    
    69,240tonnes
    
    
    
    98,076tonnes
    
    
    
    123,294tonnesProduction yield(6)(7)
    
    3.6 tonnesper mu
    
    3.9 tonnesper mu
    
    5.4 tonnesper mu
    
    6.4 tonnesper muRevenue-per-mu(6)(8)
    
    RMB9,611
    
    RMB11,167
    
    RMB15,497
    
    
    RMB21,226$(3,241)
 
 (1)
    
    On October 29, 2010, all preferred shares were automatically converted into
ordinary shares on an one-to-one basis upon the completion of our initial public
offering. Prior to this conversion, holders of our ordinary and preferred shares had
equal rights to receive dividends from our earnings. The automatic conversion did not
result in retrospective adjustments to the previously reported amounts of basic and
diluted earnings per share for the fiscal years ended March 31, 2008, 2009 and 2010
since the weighted average number of shares used in the calculation of basic and diluted
earnings per share includes both ordinary and preferred shares.(2)
    
    Adjusted cost of inventories sold is defined as cost of inventories sold before
biological assets fair value adjustment. We are primarily engaged in agricultural
activities of cultivating, processing and distributing vegetables and have therefore
adopted International Accounting Standard 41 Agriculture, or IAS 41, in accounting for
biological assets and agricultural produce. Unlike the historical cost accounting
model, IAS 41 requires us to recognize in our income statement the gain or loss arising
from the change in fair value less costs to sell of biological assets and agricultural
produce for each reporting period. Cost of inventories sold determined under IAS 41
reflects the deemed cost of agricultural produce, which is based on their fair value
(less costs to sell) at the point of harvest. Biological assets fair value adjustment
is the difference between the deemed cost of the agricultural produce and the plantation
expenditure we incurred to cultivate the produce to the point of harvest. Although an
adjusted cost of inventories sold excluding these fair value adjustments is a non-IFRS
measure, we believe that separate analysis of the cost of inventories sold excluding
these fair value adjustments adds clarity to the constituent parts of our cost of
inventories sold and provides additional useful information for investors to assess our
cost structure. Set forth below is a reconciliation of adjusted cost of inventories
sold to the most directly comparable IFRS measure, cost of inventories sold. Year Ended March 31,2008
    
    
    2009
    
    
    2010
    
    
    2011RMB
    
    
    RMB
    
    
    RMB
    
    
    RMB
    
    
    $(In thousands)Cost of inventories sold
    
    
    (129,228
    )
    
    
    (174,288
    )
    
    
    (238,277
    )
    
    
    (357,211
    )
    
    
    (54,550
    )Less: biological assets fair value adjustment
    
    
    65,626
    
    
    
    98,627
    
    
    
    135,712
    
    
    
    218,348
    
    
    
    33,344Adjusted cost of inventories sold
    
    
    (63,602
    )
    
    
    (75,661
    )
    
    
    (102,565
    )
    
    
    (138,863
    )
    
    
    (21,206
    )
 (3)
    
    Adjusted profit for the year is defined as profit for the year before the net
impact of biological assets fair value adjustment (defined as adjusted profit for the
year in our prospectus dated October 28, 2010) and further adjusted to exclude the
effects of non-cash share-based compensation and offering expenses charged to the income
statement. In view of the significance of non-cash share-based compensation and the
one-time nature of the offering expenses in the fiscal year ended March 31, 2011, we
have changed the calculation of adjusted profit for the year and the presentation for
the prior years to conform to the current year presentation. As discussed in note (2)
above, IAS 41 requires us to recognize in our income statement the gain or loss arising
from the change in fair value less costs to sell of biological assets and agricultural
produce for each reporting period, and to recognize cost of inventories sold at the
deemed cost based on their fair value (less costs to sell) at the point of harvest. We
believe that separate analysis of the net impact of these fair value adjustments,
non-cash share-based compensation and offering expenses charged to the income statement
adds clarity to the constituent part of our results of operations and provides
additional useful information for investors to assess the operating performance of our
business. Set forth below is a reconciliation of adjusted profit for the year to the
most directly comparable IFRS measure, profit for the year. Year Ended March 31,2008
    
    
    2009
    
    
    2010
    
    
    2011RMB
    
    
    RMB
    
    
    RMB
    
    
    RMB
    
    
    $(In thousands)Profit for the year
    
    
    38,445
    
    
    
    60,413
    
    
    
    110,202
    
    
    
    133,375
    
    
    
    20,368Add:Non-cash share-based compensation
    
    
    5,162
    
    
    
    3,140
    
    
    
    5,773
    
    
    
    21,678
    
    
    
    3,310Initial public offering expenses
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    20,323
    
    
    
    3,104Less:Net impact of biological assets
fair value adjustment
    
    
    (4,621
    )
    
    
    1,284
    
    
    
    (17,031
    )
    
    
    (23,548
    )
    
    
    (3,596
    )Adjusted profit for the year
    
    
    38,986
    
    
    
    64,837
    
    
    
    98,944
    
    
    
    151,828
    
    
    
    23,186
 (4)
    
    Adjusted EBITDA is defined as EBITDA (earnings before net finance income (costs),
income tax expense, depreciation and amortization), as further adjusted to exclude the
effects of non-cash share-based compensation, the net impact of biological assets fair
value adjustment (defined as adjusted EBITBA in our prospectus dated October 28, 2010)
and further adjusted to exclude the offering expenses charged to the income statement.
In view of
the significance of the one-time nature of the offering expenses in the fiscal year ended
March 31, 2011, we have changed the calculation of adjusted EBITDA for the year and the
presentation for the prior years to conform to the current year presentation. Although
the nature of many of these income and expense items is recurring, we have historically
excluded such impact from internal performance assessments. We believe that separate
analysis and exclusion of the impact of biological assets fair value adjustment under IAS
41, non-cash share-based compensation and offering expenses charged to the income
statement adds clarity to the constituent parts of our performance and provides
additional useful information for investors to assess the operating performance of our
business.  6




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We believe adjusted EBITDA is useful to investors because it is frequently used by
securities analysts, investors and other interested parties in the evaluation of
companies in our industry. You should use adjusted EBITDA as a supplemental analytical
measure to, and in conjunction with, our IFRS financial data. In addition, we believe
that adjusted EBITDA is useful in evaluating our operating performance compared to that
of other companies in our industry because the calculation of adjusted EBITDA generally
eliminates the effects of non-cash expenses and the effects of financing and income taxes
and the accounting effects of capital spending, which items may vary for different
companies for reasons unrelated to overall operating performance. We use these non-IFRS
financial measures for planning and forecasting and measuring results against the
forecast. Using several measures to evaluate the business allows us and investors to
assess our relative performance against our competitors and ultimately monitor our
capacity to generate returns for our shareholders.Set forth below is a reconciliation of adjusted EBITDA to the most directly comparable IFRS
measure, profit for the year. Year Ended March 31,2008
    
    
    2009
    
    
    2010
    
    
    2011RMB
    
    
    RMB
    
    
    RMB
    
    
    RMB
    
    
    $(In thousands)Profit for the year
    
    
    38,445
    
    
    
    60,413
    
    
    
    110,202
    
    
    
    133,375
    
    
    
    20,368Add:Amortization of lease prepayments
    
    
    33
    
    
    
    87
    
    
    
    104
    
    
    
    103
    
    
    
    16Depreciation
    
    
    11,401
    
    
    
    24,464
    
    
    
    35,057
    
    
    
    47,406
    
    
    
    7,239Finance costs
    
    
    43
    
    
    
    
    
    
    
    709
    
    
    
    4,643
    
    
    
    709Income tax expense
    
    
    2,635
    
    
    
    200
    
    
    
    890
    
    
    
    101
    
    
    
    15Non-cash share-based compensation
    
    
    5,162
    
    
    
    3,140
    
    
    
    5,773
    
    
    
    21,678
    
    
    
    3,310Biological assets fair value
adjustment included in cost of
inventories sold
    
    
    65,626
    
    
    
    98,627
    
    
    
    135,712
    
    
    
    218,348
    
    
    
    33,344Initial public offering expenses
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    20,323
    
    
    
    3,104Less:Finance income:
    
    
    249
    
    
    
    546
    
    
    
    101
    
    
    
    2,881
    
    
    
    439Changes in fair value less costs
to sell of biological assets
    
    
    70,247
    
    
    
    97,343
    
    
    
    152,743
    
    
    
    241,896
    
    
    
    36,940Adjusted EBITDA
    
    
    52,849
    
    
    
    89,042
    
    
    
    135,603
    
    
    
    201,200
    
    
    
    30,726
 (5)
    
    Total arable land area includes land leased and either in operation or under
construction by us, and excludes land that we used on a temporary basis.(6)
    
    For the purposes of calculating production yield and revenue-per-mu, average land
area within each reporting period also includes land that we use on a temporary basis to
generate the production output and revenue.(7)
    
    Production yield is calculated by dividing total production output by average
arable land within each reporting period.(8)
    
    Revenue-per-mu is calculated by dividing revenue by average arable land within
each reporting period. Exchange Rate Information
    7




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Noon Buying Rate(RMB per US$1.00)Period
    
    
    AveragePeriod
    
    End
    
    
    (1)
    
    
    Low
    
    
    High2006
    
    
    7.8041
    
    
    
    7.9579
    
    
    
    8.0702
    
    
    
    7.80412007
    
    
    7.2946
    
    
    
    7.5806
    
    
    
    7.8127
    
    
    
    7.29462008
    
    
    6.8225
    
    
    
    6.9193
    
    
    
    7.2946
    
    
    
    6.78002009
    
    
    6.8259
    
    
    
    6.8295
    
    
    
    6.8470
    
    
    
    6.81762010
    
    
    6.6000
    
    
    
    6.7603
    
    
    
    6.8330
    
    
    
    6.60002011January
    
    
    6.6017
    
    
    
    6.5964
    
    
    
    6.6364
    
    
    
    6.5809February
    
    
    6.5713
    
    
    
    6.5761
    
    
    
    6.5965
    
    
    
    6.5520March
    
    
    6.5483
    
    
    
    6.5645
    
    
    
    6.5743
    
    
    
    6.5483April
    
    
    6.4900
    
    
    
    6.5267
    
    
    
    6.5477
    
    
    
    6.4900May
    
    
    6.4786
    
    
    
    6.4957
    
    
    
    6.5073
    
    
    
    6.4786June
    
    
    6.4635
    
    
    
    6.4746
    
    
    
    6.4836
    
    
    
    6.4628July
(through July 8, 2011)
    
    
    6.4645
    
    
    
    6.4655
    
    
    
    6.4670
    
    
    
    6.4645
 
 (1)
    
    Annual averages are calculated using the average of month-end rates. Monthly
averages are calculated using the average of the daily rates during the relevant period. B. Capitalization and Indebtedness
  C. Reasons for the Offer and Use of Proceeds
  D. Risk Factors
 Risks Related to Our Business
 We primarily rely on arrangements with farmer households, local villagers committees or local
governments to lease farmland or forestland. If we were unable to continue these arrangements
or enter into other new arrangements on commercially reasonable terms, or at all, our growth
would be slowed down or inhibited.
  If the legality or validity of our leases of agricultural land is challenged, our operations
could be disrupted.
    8




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We may face proceedings or claims for unpaid rent from farmer households.
  Extreme weather conditions, natural disasters, crop diseases, pests and other natural conditions
can create substantial volatility for our business and results of operations.
    9




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Our business is susceptible to potential climate change globally and in China.
  Water or power shortage or other calamities could disrupt our production and have a material
adverse effect on our business, financial position and results of operations.
  Our business is sensitive to fluctuations in market prices and demand for our products.
   We may not be able to accurately predict and successfully adapt to changes in market demand.
  We are subject to the risk of product contamination and product liability claims as well as
negative publicity associated with food safety issues in China.
   10




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Our operations are highly regulated in the areas of food safety and protection of human health
and we may be subject to the risk of incurring compliance costs and the risk of potential claims
and regulatory actions.
  Our limited operating history may not serve as an adequate basis to judge our future prospects
and results of operations.
  Unfavorable fluctuations in the prices of or shortages in raw materials will increase our
production costs and adversely affect our profitability.
  The Chinese fresh vegetable market is highly competitive and our growth and results of
operations may be adversely affected if we are unable to compete effectively.
    11




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If we are unable to successfully manage our growth, our business, results of operations and
financial condition could be materially adversely affected.
   We depend upon key employees in a competitive market. If we are unable to attract and retain
key personnel, it could adversely affect our ability to develop and market our products.
   Wrongdoings by our employees and farm workers may harm our business.
  Our failure to protect our intellectual property rights may undermine our competitive position,
and litigation to protect our intellectual property rights or defend against third-party
allegations of infringement may be costly.
   12




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We rely on confidentiality agreements that could be breached and may be difficult to enforce,
which could have a material adverse effect on our business and competitive position.
  
    
    these agreements may be breached;
 
    
    these agreements may not provide adequate remedies for the applicable type of breach; or
 
    
    our trade secrets or proprietary know-how will otherwise become known.
  Labor shortages and rising labor cost may adversely affect our business and increase our
operation costs.
  We may be subject to claims or administrative penalties for non-execution of labor contracts or
nonpayment or underpayment of social insurance and housing fund in respect of our farm workers
and our full time employees, which may adversely affect our business, financial condition and
results of operations.
    13




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##### Table of Contents



We may be affected by export and import laws and policies and other barriers to trade.
   Our database may not be as effective as anticipated.
   We are subject to environmental regulations and may be exposed to liability and potential costs
for environmental compliance.
    14




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##### Table of Contents



We have limited insurance coverage in China.
  If we fail to establish an effective system of internal controls, we may be unable to accurately
report our financial results or prevent fraud, and investor confidence and the market price of
our ADSs may be adversely impacted.
   We face risks related to health epidemics and other outbreaks.
   15




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##### Table of Contents



The global economic downturn may have a material and adverse effect on our business, financial
condition, results of operations and liquidity.
  As a foreign private issuer, we are permitted to follow certain home country corporate
governance practices in lieu of certain NASDAQ requirements. This may afford less protection to
holders of our ordinary shares.
  We are a foreign private issuer and, as a result, we are not subject to U.S. proxy rules and are
subject to Exchange Act reporting obligations that, to some extent, are more lenient and less
frequent than those of a U.S. issuer.
  We may be classified as a passive foreign investment company, which could result in adverse U.S.
federal income tax consequences to U.S. Holders of our ADSs or ordinary shares.
   16




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Risks Related to Doing Business in China
 Adverse changes in economic and political policies of the PRC government could have a material
and adverse effect on overall economic growth in China, which could materially and adversely
affect our business.
  Future changes in laws, regulations or enforcement policies in China could adversely affect our
business.
  We rely principally on dividends and other distributions on equity paid by our subsidiaries in
China and Hong Kong to fund our cash and financing requirements, and any limitation on the
ability of our subsidiaries to make payments to us could have a material and adverse effect on
our ability to conduct our business.
  The dividends we receive from our PRC subsidiaries may be subject to PRC tax under the new
Enterprise Income Tax Law, which would have a material adverse effect on our results of
operations.
   17




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##### Table of Contents



Changes in PRC government policy on foreign investment in China may adversely affect our
business and results of operations.
   PRC regulation of loans to and direct investments in PRC entities by offshore holding companies
may delay or prevent us from making loans or additional capital contributions to our PRC
operating subsidiaries.
  Fluctuations in the value of the Renminbi may have a material and adverse effect on your
investment.
    18




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##### Table of Contents



Governmental control of currency conversion may limit our ability to utilize our revenues
effectively and affect the value of your investment.
  Regulations relating to offshore investment activities by PRC residents may limit our ability to
acquire PRC companies and could adversely affect our business, financial condition and results
of operations.
  Failure to comply with PRC regulations regarding the registration requirements for employee
stock ownership plans or share option plans may subject our PRC stock incentive plan
participants or us to fines and other legal or administrative sanctions.
  Uncertainties with respect to the Chinese legal system could have a material and adverse effect
on us.
   19




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##### Table of Contents



Our business benefits from certain government incentives. Expiration of, or changes to, these
incentives could have a material adverse effect on our operating results by significantly
increasing our tax expenses.
   If the approval of the China Securities Regulatory Commission was required in connection with
our initial public offering in November 2010, we could be subject to sanctions, fines and other
penalties. The regulation also establishes more complex procedures for acquisitions by foreign
investors, which could make it more difficult to pursue growth through acquisitions.
    20




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##### Table of Contents



Risks Related to Our ADSs
 The market price for our ADSs may be volatile.
  
    
    regulatory developments in our target markets affecting us, our customers or our
competitors;
 
    
    actual or anticipated fluctuations in our quarterly operating results and changes or
revisions of our expected results;
 
    
    changes in financial estimates by securities research analysts;
 
    
    announcements of technological or competitive developments;
 
    
    any litigation, governmental investigation or enforcement proceedings brought against us
by authorities and industry regulators in China or elsewhere;
 
    
    addition or departure of our senior management and key personnel;
 
    
    changes in the economic performance or market valuations of other agricultural
companies;
 
    
    economic, regulatory or political developments in China;
 
    
    release or expiration of lock-up or other transfer restrictions on our outstanding
ordinary shares or ADSs; and
 
    
    sales of additional ordinary shares or ADSs, or the perception that such sales might
occur.
  Substantial future sales of our ADSs in the public market, or the perception that such sales
might occur, could cause the price of our ADSs to decline.
  Our principal shareholders have substantial influence over our company and their interests may
not be aligned with the interests of our other shareholders.
    21




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##### Table of Contents



Holders of ADSs have fewer rights than shareholders and must act through the depositary to
exercise those rights.
  You may be subject to limitations on transfers of your ADSs.
  Your right to participate in any future rights offerings may be limited, which may cause
dilution to your holdings.
  You may not receive cash dividends if the depositary decides that it is inequitable or
impractical to make them available to you.
  We are a Cayman Islands company and, because judicial precedent regarding the rights of
shareholders is more limited under Cayman Islands law than under U.S. law, you may have less
protection of your shareholder rights than you would under U.S. law.
    22




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##### Table of Contents




    
    recognize or enforce against us or our directors or officers all judgments of courts of
the United States predicated upon civil liability provisions of U.S. securities laws; and
 
    
    impose liability against us or our directors or officers, in original actions brought in
the Cayman Islands, based on all civil liability provisions of U.S. securities laws or laws
of any state in the U.S.
  Your ability to bring an action against us or against our directors and officers, or to enforce
a judgment against us or them, will be limited because we are incorporated in the Cayman
Islands, because we conduct substantially all of our operations in China and Hong Kong and
because the majority of our directors and officers reside outside of the United States.
  Our articles of association contains anti-takeover provisions that could have a material adverse
effect on the rights of holders of our ordinary shares and ADSs.
  
 Item 4. Information on the Company
 A. History and Development of the Company
   23




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##### Table of Contents



B. Business Overview
 Overview
      24




---



##### Table of Contents



Our Products
   Business Model
  
   25




---



##### Table of Contents



Greenhouses and Other Agricultural Facilities
     Horticultural Know-how
  Disease Control.
  26




---



##### Table of Contents



Water Application Management.
  Harvest.
 Database
   Production Bases
    27




---



##### Table of Contents



Arable Area
    
    
    Arable AreaProduction Base(1)
    
    Location
    
    
    (mu)
    
    
    (hectare)Huizhou
    
    Guangdong
    
    
    
    4,024
    
    
    
    268Shantou
    
    Guangdong
    
    
    
    1,314
    
    
    
    88Ningde
    
    Fujian
    
    
    
    2,346
    
    
    
    156Fuzhou
    
    Fujian
    
    
    
    229
    
    
    
    15Quanzhou
    
    Fujian
    
    
    
    250
    
    
    
    17Quangang
    
    Fujian
    
    
    
    2,782
    
    
    
    185Zhangpu
    
    Fujian
    
    
    
    2,125
    
    
    
    142Xianyou
    
    Fujian
    
    
    
    2,200
    
    
    
    147Zhangjiakou
    
    Hebei
    
    
    
    3,982
    
    
    
    265Zishan Orchard
    
    Fujian
    
    
    
    1,150
    
    
    
    77Total
    
    
    
    
    
    
    20,402
    
    
    
    1,360
 
 (1)
    
    We regrouped our production bases in 2011 and, as a result, the number of our
production bases changed from 16 to 8. In addition, we added two new production bases
in December 2010.   Quality Control and Food Safety
     28




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##### Table of Contents



Customers
  Fiscal Year Ended March 31,2009
    
    
    2010
    
    
    2011RMB
    
    
    %
    
    
    RMB
    
    
    %
    
    
    RMB
    
    
    $
    
    
    %(In thousands, except percentages)Wholesalers
    
    
    94,537
    
    
    
    47.5
    
    
    
    137,546
    
    
    
    49.0
    
    
    
    213,974
    
    
    
    32,676
    
    
    
    52.6Institutional customers
    
    
    77,284
    
    
    
    38.8
    
    
    
    100,969
    
    
    
    36.0
    
    
    
    149,131
    
    
    
    22,774
    
    
    
    36.7Supermarkets
    
    
    26,845
    
    
    
    13.5
    
    
    
    41,235
    
    
    
    14.7
    
    
    
    43,099
    
    
    
    6,582
    
    
    
    10.6Others(1)
    
    
    329
    
    
    
    0.2
    
    
    
    762
    
    
    
    0.3
    
    
    
    568
    
    
    
    87
    
    
    
    0.1Total
    
    
    198,995
    
    
    
    100.0
    
    
    
    280,512
    
    
    
    100.0
    
    
    
    406,772
    
    
    
    62,119
    
    
    
    100.0
 
 (1)
    
    Includes retailers and small distributors who are not our regular customers. Wholesale
     Institutional customers
  Supermarket chains
    29




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Sales, Marketing and Distribution
      Supplies and Utilities
   Competition
   30




---



##### Table of Contents



Intellectual Property
  Insurance
  Environmental Matters
   Regulations
  Agriculture Law
  Laws and Regulations Relating to Agricultural Products
 Agricultural Product Quality Safety Law
    31




---



##### Table of Contents



Food Safety Law
   Food Export
       32




---



##### Table of Contents



Quality Marks on Agricultural Product
     Land Use Rights
 Collective-owned Agricultural Land in Rural Areas
  Title Certificate of Collective-owned Land
  Rural Land Contracted Operation Rights
   33




---



##### Table of Contents



Environmental Protection Regulations
    Foreign Currency Exchange
  
    
    Foreign Currency Administration Rules (1996), as amended, or the Exchange Rules; and
 
    
    Administration Rules of the Settlement, Sale and Payment of Foreign Exchange (1996), or
the Administration Rules.
   Dividend Distribution
  
    
    Wholly Foreign Owned Enterprise Law (1986), as amended; and
 
    
    Wholly Foreign Owned Enterprise Law Implementation Rules (1990), as amended.
  34




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##### Table of Contents



Foreign Exchange Administration Rules
 Foreign Exchange Registration of Offshore Investment by PRC Residents
    Regulations on Overseas Listing
    35




---



##### Table of Contents



C. Organizational Structure
  
  36




---



##### Table of Contents



D. Property, Plant and Equipment
    Item 4A.
    
    Unresolved Staff Comments
  
 Item 5.
    
    Operating and Financial Review and Prospects
  A. Operating Results
 Overview
      37




---



##### Table of Contents



Financial Overview
 Revenue
    Fiscal Year Ended March 31,2009
    
    
    2010
    
    
    2011RMB
    
    
    %
    
    
    RMB
    
    
    %
    
    
    RMB
    
    
    $
    
    
    %(In thousands)Wholesalers
    
    
    94,537
    
    
    
    47.5
    
    
    
    137,546
    
    
    
    49.0
    
    
    
    213,974
    
    
    
    32,676
    
    
    
    52.6Institutional customers
    
    
    77,284
    
    
    
    38.8
    
    
    
    100,969
    
    
    
    36.0
    
    
    
    149,131
    
    
    
    22,774
    
    
    
    36.7Supermarkets
    
    
    26,845
    
    
    
    13.5
    
    
    
    41,235
    
    
    
    14.7
    
    
    
    43,099
    
    
    
    6,582
    
    
    
    10.6Others(1)
    
    
    329
    
    
    
    0.2
    
    
    
    762
    
    
    
    0.3
    
    
    
    568
    
    
    
    87
    
    
    
    0.1Total
    
    
    198,995
    
    
    
    100.0
    
    
    
    280,512
    
    
    
    100.0
    
    
    
    406,772
    
    
    
    62,119
    
    
    
    100.0
 
 (1)
    
    Includes retailers and small distributors who are not our regular customers.       38




---



##### Table of Contents



Cost of inventories sold
         Biological Asset Fair Valuation and Its Impact on Cost of Inventories and Results of Operations
    39




---



##### Table of Contents



Year ended March 31,2009
    
    
    20010
    
    
    2011RMB
    
    
    RMB
    
    
    RMB
    
    
    $(In thousands)Biological assets fair value adjustment included in cost of
inventories sold
    
    
    (98,627
    )
    
    
    (135,712
    )
    
    
    (218,348
    )
    
    
    (33,344
    )Changes in fair value less costs to sell of biological assets
    
    
    97,343
    
    
    
    152,743
    
    
    
    241,896
    
    
    
    36,940Net impact
    
    
    (1,284
    )
    
    
    17,031
    
    
    
    23,548
    
    
    
    3,596
   
    
    the volume of crops on the land at the period ends;
 
    
    the product mix of the crops on the land at the period ends; and
 
    
    the market prices at the period ends of different products.
   40




---



##### Table of Contents



Key Factors Affecting Our Results of Operations
 Revenue-Per-Mu
  Production yield
   Product mix
  Product pricing
   Size of Arable Land
   41




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##### Table of Contents



Market Demand
  Operating Costs and Expenses
  Year Ended March 31,2009
    
    
    2010
    
    
    2011RMB
    
    
    %
    
    
    RMB
    
    
    %
    
    
    RMB
    
    
    $
    
    
    %(In thousands, except percentages)Packing expenses
    
    
    15,620
    
    
    
    7.8
    
    
    
    18,281
    
    
    
    6.5
    
    
    
    28,248
    
    
    
    4,314
    
    
    
    6.9Land preparation costs
    
    
    9,755
    
    
    
    4.9
    
    
    
    12,434
    
    
    
    4.4
    
    
    
    20,800
    
    
    
    3,176
    
    
    
    5.1Research and
development expenses
    
    
    5,855
    
    
    
    2.9
    
    
    
    6,519
    
    
    
    2.3
    
    
    
    7,298
    
    
    
    1,114
    
    
    
    1.8Selling and
distribution expenses
    
    
    10,097
    
    
    
    5.1
    
    
    
    18,207
    
    
    
    6.5
    
    
    
    24,949
    
    
    
    3,810
    
    
    
    6.1Administrative expenses
    
    
    17,900
    
    
    
    9.0
    
    
    
    25,059
    
    
    
    8.9
    
    
    
    68,978
    
    
    
    10,534
    
    
    
    17.0Other expenses
    
    
    3,980
    
    
    
    2.0
    
    
    
    3,404
    
    
    
    1.2
    
    
    
    6,070
    
    
    
    928
    
    
    
    1.5
 Packing expenses
 Land preparation costs
 Research and development expenses
 
    
    direct cost of materials used in research and development such as seeds, fertilizers,
pesticides and consumable materials;
 
    
    salaries and related expenses for research and development personnel;
 
    
    rent for our research facilities; and
 
    
    depreciation.
  42




---



##### Table of Contents



Selling and distribution expenses
 Administrative expenses
 
    
    salaries, bonuses and benefits for our administrative and management personnel;
 
    
    auditing fees and legal and other professional fees; and
 
    
    travel and other expenses associated with our corporate and administrative activities.
  Other expenses
 Taxation
 The Cayman Islands, the British Virgin Islands and Hong Kong
  PRC
 Enterprise Income Tax
    43




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##### Table of Contents



Year Ended March 31,2009
    
    
    2010
    
    
    2011RMB
    
    
    RMB
    
    
    RMB
    
    
    $(In thousands, except for per share data)Profit for the year
    
    
    17,774
    
    
    
    32,906
    
    
    
    48,570
    
    
    
    7,417Basic earnings per ordinary/preferred share (in cents)
    
    
    1.06
    
    
    
    1.95
    
    
    
    2.43
    
    
    
    0.37Diluted earnings per ordinary/preferred share (in cents)
    
    
    1.05
    
    
    
    1.92
    
    
    
    2.35
    
    
    
    0.36
     Value-added Tax
  Critical Accounting Policies
    44




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##### Table of Contents



Fair Value of Biological Assets and Agricultural Produce
      
    
    a 5% increase or decrease in the vegetable prices we assumed, in the absence of other
changes, will result in an RMB5.1 million ($785,000) increase or decrease in our net change
in fair value less costs to sell of biological assets and profit for the year; and
 
    
    an increase or decrease in the average discount rate we used by one percentage point, in
the absence of other changes, will result in an RMB481,000 ($73,000) decrease or increase
in our net change in fair value less costs to sell of biological assets and profit for the
year.
 Share Option Valuation
   45




---



##### Table of Contents




    
    time to expect the liquidity event, i.e. an initial public offering, which is determined
based on the managements expected timing of an initial public offering;
 
    
    company risks associated with holding an investment in an illiquid market, including the
required holding return, the growth in underlying value during the holding period and the
expected cash flow distributions during the holding period;
 
    
    prevailing risk free rate; and
 
    
    volatility in the underlying security.
   At April 17, 2009
    
    
    At March 29, 2010
    
    
    At August 31, 2010(Date of Grant)
    
    
    (Date of Grant)
    
    
    (Date of Grant)Fair value at measurement date
    
    $
    0.02035   $0.02385
    
    
    $
    0.02912   $0.03209
    
    
    $
    0.04571   $0.04862Share price
    
    $
    0.05015
    
    
    $
    0.06061
    
    
    $
    0.083Exercise price
    
    $
    0.07293
    
    
    $
    0.07570
    
    
    $
    0.080Expected volatility

(expressed as average volatility used
in the modeling under the Black-Scholes
Option Pricing model)
    
    
    51.30%   53.70
    %
    
    
    56.90
    %
    
    
    57.60%   58.70
    %Option life

(expressed as average volatility used
in the modeling under the Black-Scholes
Option Pricing modules)
    
    5.5   6.5 years
    
    
    5.5   6.5 years
    
    
    5.5   6.5 yearsExpected dividends
    
    
    
    
    
    
    
    
    
    
    Risk-free interest rate

(based on USD China Sovereign Bond Rate)
    
    
    3.75%   3.90
    %
    
    
    2.96%   3.26
    %
    
    
    2.51%   2.75
    %
  46




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##### Table of Contents



Depreciation and Estimated Useful Life
  Land improvements, buildings and farmland
infrastructure
    
       Shorter of the unexpired term of land
leases and their estimated useful lives of 3 to 30 yearsEquipment and machinery
    
       3 to 10 yearsMotor vehicles
    
       3 to 10 yearsFurniture, fixtures and computer equipment
    
       5 years
   Impairment of Assets
   
    
    property, plant and equipment;
 
    
    construction in progress;
 
    
    lease prepayments; and
 
    
    long-term deposits and prepayments.
  
    
    Calculation of recoverable amount. The recoverable amount of an asset is the greater of
its fair value less costs to sell and value in use. In assessing value in use, we discount
the estimated future cash flows to their present value using a pre-tax discount rate that
reflects current market assessments of the time value of money and the risks specific to
the asset. Where an asset does not generate cash inflows largely independent of those from
other assets, we determine the recoverable amount for the smallest group of assets that
generates cash inflows independently (i.e. a cash-generating unit).
  47




---



##### Table of Contents




    
    Recognition of impairment losses. We recognize an impairment loss is recognized in
profit or loss if the carrying amount of an asset, or the cash-generating unit to which it
belongs, exceeds its recoverable amount. We allocate impairment losses recognized in
respect of cash-generating units to reduce the carrying amount of the other assets in the
unit (or group of units) on a pro rata basis, except that the carrying value of an asset
will not be reduced below its individual fair value less costs to sell, or value in use, if
determinable.
 
    
    Reversals of impairment provisions. We reverse an impairment provision if there has
been a favorable change in the estimates used to determine the recoverable amount.
    
    
    significant financial difficulty of the debtor;
 
    
    breach of contract;
 
    
    it becoming probable that the debtor will enter bankruptcy or other financial
reorganization; and
 
    
    significant changes in the technological, market, economic or legal environment that
have an adverse effect on the debtor.
   Results of Operations
  Year Ended March 31,2009
    
    
    2010
    
    
    2011RMB
    
    
    RMB
    
    
    RMB
    
    
    $(In thousands)Revenue
    
    
    198,995
    
    
    
    280,512
    
    
    
    406,772
    
    
    
    62,119Cost of inventories sold
    
    
    (174,288
    )
    
    
    (238,277
    )
    
    
    (357,211
    )
    
    
    (54,550
    )Changes in fair value less
costs to sell related to:Crops harvested during
the
year
    
    
    80,795
    
    
    
    119,009
    
    
    
    186,183
    
    
    
    28,432Growing crops on the
farmland at the year end
    
    
    16,548
    
    
    
    33,734
    
    
    
    55,713
    
    
    
    8,508Total changes in fair value
less costs to sell of
biological assets
    
    
    97,343
    
    
    
    152,743
    
    
    
    241,896
    
    
    
    36,940
  48




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##### Table of Contents



Year Ended March 31,2009
    
    
    2010
    
    
    2011RMB
    
    
    RMB
    
    
    RMB
    
    
    $(In thousands)Packing expenses
    
    
    (15,620
    )
    
    
    (18,281
    )
    
    
    (28,248
    )
    
    
    (4,314
    )Land preparation costs
    
    
    (9,755
    )
    
    
    (12,434
    )
    
    
    (20,800
    )
    
    
    (3,176
    )Other income
    
    
    1,224
    
    
    
    626
    
    
    
    124
    
    
    
    19Research and development
expenses
    
    
    (5,855
    )
    
    
    (6,519
    )
    
    
    (7,298
    )
    
    
    (1,114
    )Selling and distribution
expenses
    
    
    (10,097
    )
    
    
    (18,207
    )
    
    
    (24,949
    )
    
    
    (3,810
    )Administrative expenses
    
    
    (17,900
    )
    
    
    (25,059
    )
    
    
    (68,978
    )
    
    
    (10,534
    )Other expenses
    
    
    (3,980
    )
    
    
    (3,404
    )
    
    
    (6,070
    )
    
    
    (928
    )Results from operating
activities
    
    
    60,067
    
    
    
    111,700
    
    
    
    135,238
    
    
    
    20,652Finance income
    
    
    546
    
    
    
    101
    
    
    
    2,881
    
    
    
    440Finance costs
    
    
    
    
    
    
    (709
    )
    
    
    (4,643
    )
    
    
    (709
    )Net finance income/(costs)
    
    
    546
    
    
    
    (608
    )
    
    
    (1,762
    )
    
    
    (269
    )Profit before taxation
    
    
    60,613
    
    
    
    111,092
    
    
    
    133,476
    
    
    
    20,383Income tax expense
    
    
    (200
    )
    
    
    (890
    )
    
    
    (101
    )
    
    
    (15
    )Profit for the year
    
    
    60,413
    
    
    
    110,202
    
    
    
    133,375
    
    
    
    20,368
  Year Ended March 31,2009
    
    
    2010
    
    
    2011RMB
    
    
    RMB
    
    
    RMB
    
    
    $(In thousands)Biological assets
fair value adjustment
included in cost of
inventories sold
    
    
    (98,627
    )
    
    
    (135,712
    )
    
    
    (218,348
    )
    
    
    (33,344
    )Changes in fair value
less costs to sell of
biological assets
    
    
    97,343
    
    
    
    152,743
    
    
    
    241,896
    
    
    
    36,940Net impact
    
    
    (1,284
    )
    
    
    17,031
    
    
    
    23,548
    
    
    
    3,596
 Year Ended March 31, 2011 Compared to Year Ended March 31, 2010
 Revenue
  Cost of Inventories Sold
  49




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##### Table of Contents



Changes in Fair Value Less Costs to Sell of Biological Assets and Net Impact of Biological
Assets Fair Value Adjustment
   Packing Expenses
 Land Preparation Costs
 Other Income
 Research and Development Expenses
 Selling and Distribution Expenses
 Administrative Expenses
 Other Expenses
  50




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##### Table of Contents



Results of Operating Activities
 Net Finance Income/(Cost)
 Income Tax Expense
 Profit for the Year
 Year Ended March 31, 2010 Compared to Year Ended March 31, 2009
 Revenue
  Cost of Inventories Sold
  Changes in Fair Value Less Costs to Sell of Biological Assets and Net Impact of Biological
Assets Fair Value Adjustment
    51




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##### Table of Contents



Packing Expenses
 Land Preparation Costs
 Other Income
 Research and Development Expenses
 Selling and Distribution Expenses
 Administrative Expenses
 Other Expenses
 Results of Operating Activities
 Net Finance Income/(Cost)
 Income Tax Expense
 Profit for the Year
  52




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##### Table of Contents



B. Liquidity and Capital Resources
     
    
    we will maintain at all times on a consolidated basis (i) a debt/EBITDA (earnings before
interest, taxes, depreciation and amortization) ratio not exceeding 2.0, (ii) a debt/equity
ratio not exceeding 1.5 and (iii) a current ratio not less than 1.5;
 
    
    without DEGs consent, we will not make any dividend or other capital distribution or
similar payment which would have a material adverse effect on our ability to repay the
loan;
 
    
    without DEGs consent, we will not amend our constitutional documents in a way
inconsistent with the loan agreement, or sell, transfer or otherwise dispose of significant
components of our fixed assets;
 
    
    without DEGs consent, we will not enter into any partnership or profit sharing where
our income is shared with any other person (except for our shareholders and option
holders);
 
    
    the loan will be applied exclusively to fund the development of farmland and the
construction of greenhouses, irrigation systems and agricultural facilities in the PRC;
 
    
    our PRC subsidiaries will comply with a corrective plan defining actions, budgets and a
timeframe to remediate all known non-compliance with respect to environmental and social
matters and comply with the International Finance Corporation General Environmental Health
and Safety Guidelines; and
 
    
    our PRC subsidiaries will develop and implement a supervision and grievance mechanism
related to land lease issues and their relationships with adjacent communities and will
appoint a senior management member responsible for environmental and social issues.
    53




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##### Table of Contents



Cash Flows and Working Capital
  Year Ended March 31,2009
    
    
    2010
    
    
    2011RMB
    
    
    RMB
    
    
    RMB
    
    
    $(In thousands)Net cash generated from operating activities
    
    
    50,920
    
    
    
    117,601
    
    
    
    129,459
    
    
    
    19,770Net cash used in investing activities
    
    
    (135,890
    )
    
    
    (160,365
    )
    
    
    (260,251
    )
    
    
    (39,743
    )Net cash generated from financing activities
    
    
    108,771
    
    
    
    74,234
    
    
    
    603,515
    
    
    
    92,164Net increase in cash
    
    
    23,801
    
    
    
    31,470
    
    
    
    472,723
    
    
    
    72,191Cash at the beginning of the year
    
    
    85,360
    
    
    
    107,939
    
    
    
    139,207
    
    
    
    21,258Cash at the end of the year
    
    
    107,939
    
    
    
    139,207
    
    
    
    598,722
    
    
    
    91,432
 Operating Activities
   Investing Activities
   Financing Activities
   54




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##### Table of Contents



Capital Expenditures
  Recent Accounting Pronouncements
  
    
    Revised IAS 24, Related Party Disclosures, effective for periods beginning on or after
January 1, 2011.
 
    
    Improvements to IFRSs 2010 effective for periods beginning on or after July 1, 2010 or
January 1, 2011.
 
    
    IFRS 9, Financial instruments effective for periods beginning on or after January 1,
2013.
  C. Research and Development
       55




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##### Table of Contents



D. Trend Information
  E. Off-Balance Sheet Commitments and Arrangements
  F. Contractual Obligations and Commercial Commitments
  Payment Due by PeriodLess than
    
    
    1-3
    
    
    3-5
    
    
    More thanContractual Obligations
    
    Total
    
    
    1 Year
    
    
    Years
    
    
    Years
    
    
    5 Years(RMB in thousands)Debt obligations (including interest)
    
    
    118,474
    
    
    
    16,735
    
    
    
    47,802
    
    
    
    53,937
    
    
    
    Operating lease obligations
    
    
    162,154
    
    
    
    10,592
    
    
    
    23,785
    
    
    
    20,822
    
    
    
    106,955Purchase obligations
    
    
    46,188
    
    
    
    46,188
    
    
    
    
    
    
    
    
    
    
    
    Total
    
    
    326,816
    
    
    
    73,515
    
    
    
    71,587
    
    
    
    74,759
    
    
    
    106,955
  G. Safe Harbor
  
    
    our anticipated growth strategies, including enhancing our greenhouse coverage,
increasing our production scale, strengthening our sales, marketing and distribution
efforts, and expanding our research and development capability;
 
    
    our future business development, results of operations and financial condition;
 
    
    weather conditions that affect the production, transportation, storage and export of
fresh produce;
 
    
    trends and competition in the fresh vegetable market;
 
    
    future changes in laws or regulations affecting our business; and
 
    
    changes in general economic and business conditions in China.
  56




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##### Table of Contents



Item 6.
    
    Directors, Senior Management and Employees
 A. Directors and Senior Management
  Name
    
    Age
    
    Position/TitleShing Yung Ma
    
    46
    
    Chairman of the board and chief executive officerNa Lai Chiu
    
    56
    
    Vice chairman of the boardJin Li
    
    44
    
    DirectorNeil Nanpeng Shen
    
    43
    
    DirectorGordon Xiaogang Wang
    
    47
    
    DirectorChung Bong Pang
    
    35
    
    DirectorLi-Lan Cheng
    
    46
    
    DirectorAuke Cnossen
    
    38
    
    Chief financial officerHang Chen
    
    42
    
    Vice president of operationsWenlie Ma
    
    45
    
    Vice president of salesDan Ma
    
    28
    
    Production base development director
 Shing Yung Ma
 Na Lai Chiu
 Jin Li
  57




---



##### Table of Contents



Neil Nanpeng Shen
 Gordon Xiaogang Wang
 Chung Bong Pang
 Li-Lan Cheng
 Auke G. Cnossen
 Hang Chen
 Wenlie Ma
  58




---



##### Table of Contents



Dan Ma
 Employment Agreements
   B. Compensation of Directors and Executive Officers
 Compensation of Directors and Executive Officers
   Share Incentive Plans
   59




---



##### Table of Contents



Types of awards
  Eligibility
  Plan administration
  Option offer letter/Award agreement
  Vesting
     60




---



##### Table of Contents



Exercise price and term of awards
      Transfer restrictions
    Amendments or termination
     61




---



##### Table of Contents



C. Board Practices
 Board of Directors
  Committees of the Board of Directors
  Audit Committee
  
    
    selecting our independent auditors and pre-approving all auditing and non-auditing
services permitted to be performed by our independent auditors;
 
    
    reviewing with our independent auditors any audit problems or difficulties and
managements response;
 
    
    reviewing and approving all proposed related-party transactions, as defined in Item 404
of Regulation S-K under the Securities Act;
 
    
    discussing the annual audited financial statements with management and our independent
auditors;
 
    
    reviewing major issues as to the adequacy of our internal controls and any special audit
steps adopted in light of material control deficiencies;
 
    
    annually reviewing and reassessing the adequacy of our audit committee charter;
 
    
    such other matters that are specifically delegated to our audit committee by our board
of directors from time to time;
 
    
    meeting separately and periodically with management and our internal and independent
auditors; and
 
    
    reporting regularly to the full board of directors.
  Compensation Committee
  
    
    approving and overseeing the compensation package for our executive officers;
 
    
    reviewing and making recommendations to the board with respect to the compensation of
our directors;
 
    
    reviewing and approving corporate goals and objectives relevant to the compensation of
our chief executive officer, evaluating the performance of our chief executive officer in
light of those goals and objectives, and setting the compensation level of our chief
executive officer based on this evaluation; and
 
    
    reviewing periodically and making recommendations to the board regarding any long-term
incentive compensation or equity plans, programs or similar arrangements, annual bonuses,
employee pension and welfare benefit plans.
  62




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##### Table of Contents



Duties of Directors
   
    
    convening shareholders annual general meetings and reporting its work to shareholders
at such meetings;
 
    
    declaring dividends and distributions;
 
    
    appointing officers and determining the term of office of officers;
 
    
    exercising the borrowing powers of our company and mortgaging the property of our
company; and
 
    
    approving the issuance and transfer of shares of our company, including the registering
of such shares in our share register.
 Terms of Directors and Officers
  D. Employees
  Number of EmployeesAdministrative
    
    
    25Accounting and finance
    
    
    60Sales and marketing
    
    
    88Research and development
    
    
    87Others
    
    
    44Total
    
    
    304
     63




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##### Table of Contents



E. Share Ownership
  
    
    each of our directors and executive officers; and
 
    
    each person known to us to own beneficially more than 5% of our shares.
  Ordinary SharesBeneficially Owned
    
    
    %Directors and Executive Officers:Shing Yung Ma(1)
    
    
    699,461,667
    
    
    
    30.01Na Lai Chiu(2)
    
    
    94,471,666
    
    
    
    4.06Jin Li(3)
    
    
    *
    
    
    
    *Neil Nanpeng Shen(4)
    
    
    346,465,000
    
    
    
    14.94Gordon Xiaogang Wang(5)
    
    
    50,000,000
    
    
    
    2.16Chung Bong Pang
    
    
    *
    
    
    
    *Li-Lan Cheng
    
    
    *
    
    
    
    *Auke Cnossen
    
    
    *
    
    
    
    *Hang Chen
    
    
    *
    
    
    
    *Wenlie Ma
    
    
    *
    
    
    
    *Dan Ma
    
    
    *
    
    
    
    *All directors and executive officers as a group
    
    
    1,204,064,998
    
    
    
    51.18Principal Shareholders:Grow Grand Limited(6)
    
    
    667,318,001
    
    
    
    28.78Sequoia Capital China I, L.P. and its affiliates(7)
    
    
    346,465,000
    
    
    
    14.94Oppenheimer Holdings Inc.(8)
    
    
    271,791,100
    
    
    
    11.72SIG China Investments One, Ltd.(9)
    
    
    136,425,000
    
    
    
    5.88
 
 *
    
    Less than 1% of our ordinary shares(1)
    
    Consists of (i) 667,318,001 ordinary shares held by Grow Grand Limited, (ii)
20,000,000 ordinary shares held by Mr. Ma, and (iii) 12,143,666 options exercisable
within 60 days after June 30, 2011. Grow Grand Limited, a British Virgin Islands
company, is wholly owned by Shing Yung Ma. The registered address of Grow Grand
Limited is P.O. Box 957, Offshore Incorporations Centre, Road Town, Tortola, British
Virgin Islands.(2)
    
    Consists of (i) 80,638,000 ordinary shares held by Valuetrue Investments Limited,
(ii) 3,500,000 ordinary shares held by Ms. Chiu, and (iii) 10,333,666 options
exercisable within 60 days after June 30, 2011. Valuetrue Investments Limited, a
British Virgin Islands company, is 100% held by Na Lai Chiu. The registered address of
Valuetrue Investments Limited is P.O. Box 957, Offshore Incorporations Centre, Road
Town, Tortola, British Virgin Islands.(3)
    
    Consists of certain ordinary shares held by Kara International Limited. Mr. Li
is a director of Kara International Limited.(4)
    
    Consists of (i) 201,164,000 ordinary shares held by Sequoia Capital China I,
L.P., (ii) 23,112,000 ordinary shares held by Sequoia Capital China Partners Fund I,
L.P., (iii) 31,139,000 ordinary shares held by Sequoia Capital China Principals Fund I,
L.P. (together with Sequoia Capital China I, L.P. and Sequoia Capital China Partners
Fund I, L.P., the SCCI Funds), (iv) 79,429,000 ordinary shares held by Sequoia
Capital China Growth Fund I, L.P., (v) 1,879,000 ordinary shares held by Sequoia
Capital China Growth Partners Fund I, L.P., and (vi) 9,742,000 ordinary shares held by
Sequoia Capital China GF Principals Fund I, L.P., (together with Sequoia Capital China
Growth Fund I, L.P. and Sequoia Capital China Growth Partners Fund I, L.P., the SCGF
Funds). The SCCI Funds and SCGF Funds are managed by Sequoia Capital China Advisors
Limited, a company incorporated in the Cayman Islands. The SCGF Funds general partner
is Sequoia Capital China Growth Fund Management I, L.P. (SCCG Mgt). The SCCI Funds
general partner is Sequoia Capital China Management I, L.P. (SCCI Mgt). The general
partner for both SCCG Mgt and SCCI Mgt is SC China Holding Limited, a company
incorporated in the Cayman Islands. SC China Holding Limited is wholly owned by Max
Wealth Enterprises Limited, a company wholly owned by Neil Nanpeng Shen. Neil Nanpeng
Shen disclaims beneficial ownership in all securities shown except to the extent of his
pecuniary interests therein. The registered address of Sequoia Capital China I, L.P.
and its affiliates is Cricket Square, Hutchins Dr., P.O. Box 2681, Grand Cayman
KY1-1111, Cayman Islands.(5)
    
    Consists of 50,000,000 ordinary shares held by Win Seasons Holdings Limited, a
Hong Kong company 100% held by Gordon Xiaogang Wang. The registered address of Win
Seasons Holdings Limited is Room 2701, 27/F, Tesbury Centre, 28 Queens Road East,
Wanchai, Hong Kong.(6)
    
    Grow Grand Limited, a British Virgin Islands company, is wholly owned by Shing
Yung Ma. The registered address of Grow Grand Limited is P.O. Box 957, Offshore
Incorporations Centre, Road Town, Tortola, British Virgin Islands.(7)
    
    Consists of (i) 201,164,000 ordinary shares held by Sequoia Capital China I,
L.P., (ii) 23,112,000 ordinary shares held by Sequoia Capital China Partners Fund I,
L.P., (iii) 31,139,000 ordinary shares held by Sequoia Capital China Principals Fund I,
L.P., (iv) 79,429,000 ordinary shares held by Sequoia Capital China Growth Fund I, L.P.,
(v) 1,879,000 ordinary shares held by Sequoia Capital China GF Principals Fund I, L.P.,
(vi) 9,742,000 ordinary shares held by Sequoia Capital China GF Principals Fund I, L.P.
The SCCI Funds and SCGF Funds are managed by Sequoia Capital China Advisors Limited, a
company incorporated in the Cayman Islands. The SCGF Funds general partner is SCCG
Mgt. The SCCI Funds general partner is SCCI Mgt. The general partner for both SCCG
Mgt and SCCI Mgt is SC China Holding Limited, a company incorporated in the Cayman
Islands. SC China Holding Limited is wholly owned by Max Wealth Enterprises Limited, a
company wholly owned by Neil Nanpeng Shen. Neil Nanpeng Shen disclaims beneficial
ownership in all securities shown except to the extent of his pecuniary interests
therein. The registered address of Sequoia Capital China I, L.P. and its affiliates is
Cricket Square, Hutchins Dr., P.O. Box 2681, Grand Cayman KY1-1111, Cayman Islands.  64




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##### Table of Contents



(8)
    
    Based on the Schedule 13G filed with the SEC on February 14, 2011. Consists of
(i) 118,720,750 ordinarily shares held by Advantage Advisers Xanthus Fund, L.L.C.
(Xanthus), a Delaware limited liability company, which is managed by its investment
adviser, Advantage Advisers Management, L.L.C. (AAM); and (ii) 153,070,350 ordinary
shares held by Oppenheimer Holdings Inc.( Oppenheimer), a Delaware corporation, the
ultimate parent of AAM. The business address of each of Xanthus and AAM is 200 Park
Avenue, New York, NY 10166, United States of America. The business address of
Oppenheimer is located at 125 Broad Street, New York, NY 10004.(9)
    
    Consists of 136,425,000 ordinary shares SIG Asia Investment, LLL.P., the
investment manager of SIG China Investments One, Ltd (SIG), has discretionary authority
to vote and dispose of the shares held by SIG Arthur Dantchik, in his capacity as
president of SIG Asia Investment, LLL.P., may also be deemed to have investment
discretion over the shares held by SIG. Mr. Dantchik disclaims any such investment
discretion or beneficial ownership with respect to the shares held by SIG. The
registered address of SIG China Investments One, Ltd is P.O. Box 309GT, Ugland House,
South Church Street, George Town, Grand Cayman, Cayman Islands.   
 Item 7.
    
    Major Shareholders and Related Party Transactions
 A. Major Shareholders
  B. Related Party Transactions
 Transactions with Certain Directors, Shareholders and Affiliates
   Private Placement
 Series A Preferred Shares
   65




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##### Table of Contents



Series A1 Preferred Shares
  Series B Preferred Shares
     Series B1 Preferred Shares
  Shareholders Agreement
  Employment Agreements
  Share Incentive Plans
   66




---



##### Table of Contents



C. Interests of Experts and Counsel
  
 Item 8.
    
    Financial Information
 A. Consolidated Statements and Other Financial Information
  Legal and Administrative Proceedings
   Dividend Policy
     B. Significant Changes
   67




---



##### Table of Contents



Item 9.
    
    The Offer and Listing
 A. Offering and Listing Details.
  Sales PriceHigh
    
    
    LowAnnual High and Low2010 (from October 29, 2010)
    
    
    11.39
    
    
    
    6.91Quarterly High and LowFourth Quarter 2010 (from October 29, 2010)
    
    
    11.39
    
    
    
    6.91First Quarter 2011
    
    
    10.00
    
    
    
    7.18Second Quarter 2011
    
    
    9.19
    
    
    
    5.38Third
Quarter 2011 (through July 14, 2011)
    
    
    7.85
    
    
    
    6.18Monthly High and LowDecember 2010
    
    
    9.48
    
    
    
    6.91January 2011
    
    
    8.56
    
    
    
    7.18February 2011
    
    
    10.00
    
    
    
    7.80March 2011
    
    
    9.30
    
    
    
    8.60April 2011
    
    
    9.19
    
    
    
    8.60May 2011
    
    
    9.07
    
    
    
    7.80June 2011
    
    
    8.08
    
    
    
    5.38July 2011
(through July 14, 2011)
    
    
    7.85
    
    
    
    6.18
 B. Plan of Distribution
  C. Markets
  D. Selling Shareholders
  E. Dilution
  F. Expenses of the Issue
  
 Item 10.
    
    Additional Information
 A. Share Capital
  B. Memorandum and Articles of Association
   68




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##### Table of Contents



Registered Office and Objects
  Board of Directors
  Ordinary Shares
  Dividends
  Voting Rights
    Transfer of Shares
    Liquidation
   69




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##### Table of Contents



Calls on Shares and Forfeiture of Shares
  Redemption of Shares
  Variation of Rights of Shares
  Inspection of Books and Records
  Anti-takeover Provisions in Our Memorandum and Articles of Association
    C. Material Contracts
  D. Exchange Controls
  E. Taxation
 Cayman Islands Taxation
   70




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##### Table of Contents



U.S. Federal Income Taxation
   
    
    banks;
 
    
    certain financial institutions;
 
    
    insurance companies;
 
    
    regulated investment companies;
 
    
    real estate investment trusts;
 
    
    broker-dealers;
 
    
    traders that elect to mark to market;
 
    
    U.S. expatriates;
 
    
    tax-exempt entities;
 
    
    persons liable for alternative minimum tax;
 
    
    persons holding an ADS or ordinary share as part of a straddle, hedging, conversion or
integrated transaction;
 
    
    persons that actually or constructively own 10% or more of the total combined voting
power of all classes of our voting stock;
 
    
    persons who acquired ADSs or ordinary shares pursuant to the exercise of any employee
share option or otherwise as compensation; or
 
    
    partnerships or pass-through entities, or persons holding ADSs or ordinary shares
through such entities.
 INVESTORS ARE URGED TO CONSULT THEIR TAX ADVISORS ABOUT THE APPLICATION OF THE U.S. FEDERAL
TAX RULES TO THEIR PARTICULAR CIRCUMSTANCES AS WELL AS THE STATE, LOCAL, NON-U.S. AND OTHER TAX
CONSEQUENCES TO THEM OF THE PURCHASE, OWNERSHIP AND DISPOSITION OF ADSs OR ORDINARY SHARES.
  
    
    an individual who is a citizen or resident of the United States;
 
    
    a corporation (or other entity taxable as a corporation for U.S. federal income tax
purposes) created or organized in the United States or under the laws of the United States,
any State thereof or the District of Columbia;
 
    
    an estate, the income of which is subject to U.S. federal income taxation regardless of
its source; or
 
    
    a trust that (1) is subject to the primary supervision of a court within the United
States and the control of one or more U.S. persons for all substantial decisions or (2) has
a valid election in effect under applicable U.S. Treasury regulations to be treated as a
U.S. person.
  71




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##### Table of Contents



Taxation of Dividends and Other Distributions on the ADSs or Ordinary Shares
    Taxation of Disposition of ADSs or Ordinary Shares
   72




---



##### Table of Contents



Passive Foreign Investment Company
  
    
    at least 75% of its gross income for such year is passive income, or
 
    
    at least 50% of the value of its assets (based on an average of the quarterly values of
the assets) during such year is attributable to assets that produce passive income or are
held for the production of passive income.
    
    
    the excess distribution or recognized gain will be allocated ratably over your holding
period for the ADSs or ordinary shares,
 
    
    the amount allocated to the current taxable year, and any taxable years in your holding
period prior to the first taxable year in which we were a PFIC, will be treated as ordinary
income, and
 
    
    the amount allocated to each other taxable year will be subject to the highest tax rate
in effect for individuals or corporations, as applicable, for each such year, and the
interest charge generally applicable to underpayments of tax will be imposed on the
resulting tax attributable to each such year.
    73




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##### Table of Contents



Information Reporting and Backup Withholding
   Additional Reporting Requirements
  F. Dividends and Paying Agents
   74




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##### Table of Contents



G. Statement by Experts
  H. Documents on Display
  http://www.sec.gov
    I. Subsidiary Information
  
 Item 11.
    
    Quantitative and Qualitative Disclosures about Market Risk
 Inflation
  Interest Rate Risk
   75




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##### Table of Contents



Foreign Exchange Risk
    Fiscal Year Ended March 31,2009
    
    
    2010
    
    
    2011Increase/
    
    
    
    
    
    
    Increase/
    
    
    
    
    
    
    Increase/(Decrease)
    
    
    Increase/
    
    
    (Decrease)
    
    
    Increase/
    
    
    (Decrease)
    
    
    Increase/in Foreign
    
    
    (Decrease)
    
    
    in Foreign
    
    
    (Decrease)
    
    
    in Foreign
    
    
    (Decrease)Exchange
    
    
    in Profit
    
    
    Exchange
    
    
    in Profit
    
    
    Exchange
    
    
    in ProfitRates
    
    
    After Tax
    
    
    Rates
    
    
    After Tax
    
    
    Rates
    
    
    After TaxRMB000
    
    
    
    
    
    RMB000
    
    
    
    
    
    RMB000Renminbi(1)
    
    
    5
    %
    
    
    653
    
    
    
    5
    %
    
    
    2,128
    
    
    
    5
    %
    
    
    7,421(5
    )%
    
    
    (653
    )
    
    
    (5
    )%
    
    
    (2,128
    )
    
    
    (5
    )%
    
    
    (7,421
    )Hong Kong Dollars(2)
    
    
    5
    %
    
    
    (397
    )
    
    
    5
    %
    
    
    (948
    )
    
    
    5
    %
    
    
    (928
    )(5
    )%
    
    
    397
    
    
    
    (5
    )%
    
    
    948
    
    
    
    (5
    )%
    
    
    928U.S. Dollars(2)
    
    
    5
    %
    
    
    (184
    )
    
    
    5
    %
    
    
    865
    
    
    
    5
    %
    
    
    (1,258
    )(5
    )%
    
    
    184
    
    
    
    (5
    )%
    
    
    (865
    )
    
    
    (5
    )%
    
    
    1,258
 
 (1)
    
    Arising from subsidiaries outside the PRC-mainland whose functional currency is
Hong Kong dollars.(2)
    
    Arising from our subsidiaries whose functional currency is RMB.   76




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##### Table of Contents



Credit Risk
  
 Item 12.
    
    Description of Securities Other than Equity Securities
 A. Debt Securities
  B. Warrants and Rights
  C. Other Securities
  D. American Depositary Shares
  Service
    
    Fees   Issuance of ADSs
    
    Up to $0.05 per ADS issued   Cancellation of ADSs
    
    Up to $0.05 per ADS canceled   Distribution of cash dividends or other cash distributions
    
    Up to $0.05 per ADS held   Distribution of ADSs pursuant to stock dividends, free
stock distributions or exercise of rights
    
    Up to $0.05 per ADS held   Distribution of securities other than ADSs or rights to
purchase additional ADSs
    
    Up to $0.05 per ADS held   Depositary Services
    
    Up to $0.05 per ADS held on the applicable
record date(s) established by the
Depositary   Transfer of ADRs
    
    $1.50 per certificate presented for transfer
  
    
    fees for the transfer and registration of ordinary shares charged by the registrar and
transfer agent for the ordinary shares in the Cayman Islands (i.e., upon deposit and
withdrawal of ordinary shares);
 
    
    expenses incurred for converting foreign currency into U.S. dollars;
  77




---



##### Table of Contents




    
    expenses for cable, telex and fax transmissions and for delivery of securities;
 
    
    taxes and duties upon the transfer of securities (i.e., when ordinary shares are
deposited or withdrawn from deposit); and
 
    
    fees and expenses incurred in connection with the delivery or servicing of ordinary
 shares on deposit.
      
 Part II
 
 Item 13.
    
    Defaults, Dividend Arrearages and Delinquencies
  
 Item 14.
    
    Material Modifications to the Rights of Security Holders and Use of Proceeds
 A.  D. Material Modifications to the Rights of Security Holders
  E. Use of Proceeds
   78




---



##### Table of Contents




    
    approximately $69.7 million to fund the construction and improvement of our greenhouses
and other agricultural facilities; and
 
    
    the balance to fund the enhancement of our research and development capability,
including the development of our information system.
   
 Item 15.
    
    Controls and Procedures
 Disclosure Controls and Procedures
  Internal Control over Financial Reporting
   Managements Report on Internal Control over Financial Reporting and Attestation Report of the
Registered Public Accounting Firm
   79




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##### Table of Contents



Changes in Internal Controls
    
    
    We have established a business code of conduct as a guidance for proper business
behavior;
    
    We are in the process of establishing a whistleblower mechanism as a way to
identify any improper business behavior; and
    
    We are setting up policies and guidance regarding business gifts and
entertainment.
   
 Item 16A.
    
    Audit Committee Financial Expert
  
 Item 16B.
    
    Code of Ethics
  
 Item 16C.
    
    Principal Accountant Fees and Services
   80




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##### Table of Contents



Year Ended March 31,2009
    
    
    2010
    
    
    2011RMB
    
    
    RMB
    
    
    RMB
    
    
    $(in thousands)Audit fees(1)
    
    
    654
    
    
    
    2,210
    
    
    
    4,227
    
    
    
    646Audit-related fees(2)
    
    
    
    
    
    
    
    
    
    
    4,726
    
    
    
    722Tax
fees(3)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
  (1)
    
    Audit fees means the aggregate fees billed for professional services rendered
in connection with the audit or review of our financial statements.(2)
    
    Audit-related fees represents aggregate fees billed for professional services
rendered incrementally and directly in connection with our initial public offering in
2010.(3)
    
    Tax fees represents the aggregated fees billed for professional services
rendered in connection with tax compliance, tax advice and tax planning.  
 Item 16D.
    
    Exemptions from the Listing Standards for Audit Committees
  
 Item 16E.
    
    Purchases of Equity Securities by the Issuer and Affiliated Purchasers
  
 Item 16F.
    
    Change in Registrants Certifying Accountant
  
 Item 16G.
    
    Corporate Governance
  
 Part III
 
 Item 17.
    
    Financial Statements
  
 Item 18.
    
    Financial Statements
   81




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##### Table of Contents



Item 19.
    
    Exhibits
 ExhibitNumber
    
    Description of Document1.1
    
    
    Amended and Restated Memorandum and Articles of Association of the
Registrant, as currently in effect (incorporated by reference to Exhibit
3.2 of our Registration Statement on Form F-1 (file No. 333-169839), as
amended, initially filed with the Securities and Exchange Commission on
October 15, 2010)2.1
    
    
    Form of Registrants American Depositary Receipt (included in Exhibit 2.3)2.2
    
    
    Registrants Specimen Certificate for Ordinary Shares (incorporated by
reference to Exhibit 4.2 of our Registration Statement on Form F-1 (file
No. 333-169839), as amended, initially filed with the Securities and
Exchange Commission on October 15, 2010)2.3
    
    
    Form of Deposit Agreement among the Registrant, the depositary and Owners
and Beneficial Owners of the American Depositary Shares issued thereunder
(incorporated by reference to Exhibit 4.3 of our Registration Statement on
Form F-1 (file No. 333-169839), as amended, initially filed with the
Securities and Exchange Commission on October 22, 2010)8.1
    
    
    Subsidiaries of the Registrant (incorporated by reference to Exhibit 21.1
of our Registration Statement on Form F-1 (file No. 333-169839), as
amended, initially filed with the Securities and Exchange Commission on
October 8, 2010)10.1
    
    
    Series A Preferred Share Purchase Agreement by and among China Linong
International Limited, Land V. Group Limited, Land V. Limited, Shing Yung
Ma, Li Luan, Sequoia Capital China I, L.P., Sequoia Capital China Partners
Fund I, L.P., Sequoia Capital China Principals Fund I, L.P., and the then
PRC Subsidiaries (as defined therein) dated April 12, 2006 (incorporated
by reference to Exhibit 10.1 of our Registration Statement on Form F-1
(file No. 333-169839), as amended, initially filed with the Securities and
Exchange Commission on October 8, 2010)10.2
    
    
    Series A1 Preferred Share Purchase Agreement by and among China Linong
International Limited, Land V. Group Limited, Land V. Limited, Hong Kong
Linong Limited, Shing Yung Ma, Li Luan, Sequoia Capital China I, L.P.,
Sequoia Capital China Partners Fund I, L.P., Sequoia Capital China
Principals Fund I, L.P., Grow Grand Limited, Honeycomb Assets Management
Limited, and the then PRC Subsidiaries (as defined therein) dated February
14, 2007 (incorporated by reference to Exhibit 10.2 of our Registration
Statement on Form F-1 (file No. 333-169839), as amended, initially filed
with the Securities and Exchange Commission on October 8, 2010)10.3
    
    
    Series B Preferred Share Subscription Agreement by and among China Linong
International Limited, Land V. Group Limited, Land V. Limited, Hong Kong
Linong Limited, Shing Yung Ma, Li Luan, Sequoia Capital China Growth Fund
I, L.P., SIG China Investments One, Ltd, Pacven Walden Ventures VI, L.P.,
Pacven Walden Ventures Parallel VI, L.P., PreIPO Capital Partners Limited,
and the then PRC Subsidiaries (as defined therein) dated March 21, 2008
(incorporated by reference to Exhibit 10.3 of our Registration Statement
on Form F-1 (file No. 333-169839), as amended, initially filed with the
Securities and Exchange Commission on October 8, 2010)10.4
    
    
    Series B1 Preferred Share Subscription Agreement by and among China Linong
International Limited, Land V. Group Limited, Land V. Limited, Hong Kong
Linong Limited, Shing Yung Ma, Li Luan, Grow Grand Limited, Magnetic Star
Holdings Limited, Honeycomb Assets Management Limited, Valuetrue
Investments Limited, Chic Holdings Limited, Lu Rong, SIG China Investments
One, Ltd, Pacven Walden Ventures VI, L.P., Pacven Walden Ventures Parallel
VI, L.P., Sequoia Capital China I, L.P., Sequoia Capital China Partners
Fund I, L.P., Sequoia Capital China Principals Fund I, L.P., Sequoia
Capital China Growth Fund I, L.P., Sequoia Capital China Growth Partners
Fund I, L.P., Sequoia Capital China GF Principals Fund I, L.P., Made In
China Ltd., and the then PRC Subsidiaries (as defined therein) dated
December 22, 2009 (incorporated by reference to Exhibit 10.4 of our
Registration Statement on Form F-1 (file No. 333-169839), as amended,
initially filed with the Securities and Exchange Commission on October 8,
2010)10.5
    
    
    Share Purchase Agreement relating to series B preferred shares between
PreIPO Capital Partners Limited and Made In China Ltd dated April 10, 2008
(incorporated by reference to Exhibit 10.5 of our Registration Statement
on Form F-1 (file No. 333-169839), as amended, initially filed with the
Securities and Exchange Commission on October 15, 2010)10.6
    
    
    Share Purchase Agreement relating to series B preferred shares by and
among Sequoia Capital China Growth Fund I, L.P., Sequoia Capital China
Growth Partners Fund I, L.P., and Sequoia Capital China GF Principals Fund
I, L.P., dated July 18, 2008 (incorporated by reference to Exhibit 10.6
of our Registration Statement on Form F-1 (file No. 333-169839), as
amended, initially filed with the Securities and Exchange Commission on
October 8, 2010)10.7
    
    
    Accession Agreement relating to series B preferred shares by and among all
parties of series B Shareholders Agreement, Sequoia Capital China Growth
Partners Fund I, L.P., Sequoia Capital China GF Principals Fund I, L.P.,
and Made In China Ltd dated July 22, 2008 (incorporated by reference to
Exhibit 10.7 of our Registration Statement on Form F-1 (file No.
333-169839), as amended, initially filed with the Securities and Exchange
Commission on October 8, 2010)10.8
    
    
    Share Transfer Agreement relating to ordinary shares between Natural Scent
Limited and Chic Holdings Limited dated January 18, 2010 (incorporated by
reference to Exhibit 10.8 of our Registration Statement on Form F-1 (file
No. 333-169839), as amended, initially filed with the Securities and
Exchange Commission on October 8, 2010)
  82




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##### Table of Contents



ExhibitNumber
    
    Description of Document10.9
    
    
    Share Transfer Agreement relating to ordinary shares between Natural Scent
Limited and Lu Rong dated January 18, 2010(incorporated by reference to
Exhibit 10.9 of our Registration Statement on Form F-1 (file No.
333-169839), as amended, initially filed with the Securities and Exchange
Commission on October 8, 2010)10.10
    
    
    Share Purchase Agreement relating to series B1 preferred shares by and
among Sequoia Capital China I, L.P., Sequoia Capital China Partners Fund
I, L.P., Sequoia Capital China Principals Fund I, L.P., Sequoia Capital
China Growth Fund I, L.P., Sequoia Capital China Growth Partners Fund I,
L.P., Sequoia Capital China GF Principals Fund I, L.P. dated January 19,
2010 (incorporated by reference to Exhibit 4.2 of our Registration
Statement on Form F-1 (file No. 333-169839), as amended, initially filed
with the Securities and Exchange Commission on October 8, 2010)10.11
    
    
    Shareholders Agreement by and among the Registrant, China Linong
International Limited, Land V. Group Limited, Land V. Limited, Hong Kong
Linong Limited, Shing Yung Ma, Li Luan, holders of ordinary shares,
holders of series A preferred shares, holders of series A1 preferred
shares, holders of series B preferred shares, holders of series B1
preferred shares and the PRC subsidiaries dated July 16, 2010
(incorporated by reference to Exhibit 10.11 of our Registration Statement
on Form F-1 (file No. 333-169839), as amended, initially filed with the
Securities and Exchange Commission on October 8, 2010)10.12
    
    
    Loan Agreement entered into between DEG  Deutsche Investitions  Und
Entwicklungsgesellschaft Mbh and China Linong International Limited dated
November 10, 2009 (incorporated by reference to Exhibit 10.12 of our
Registration Statement on Form F-1 (file No. 333-169839), as amended,
initially filed with the Securities and Exchange Commission on October 8,
2010)10.13
    *
    
    Amended and Restated Share Retention Letter dated April 6, 2011 from Shing
Yung Ma to DEG  Deutsche Investitions  Und Entwicklungsgesellschaft
Mbh, agreed on May 3, 201110.14
    
    
    Share Retention Letter dated October 22, 2009 from Shing Yung Ma to DEG 
Deutsche Investitions  Und Entwicklungsgesellschaft Mbh, agreed on
November 10, 2009 (incorporated by reference to Exhibit 10.13 of our
Registration Statement on Form F-1 (file No. 333-169839), as amended,
initially filed with the Securities and Exchange Commission on October 8,
2010)10.15
    
    
    2010 Share Incentive Plan (incorporated by reference to Exhibit 10.14 of
our Registration Statement on Form F-1 (file No. 333-169839), as amended,
initially filed with the Securities and Exchange Commission on October 8,
2010)10.16
    
    
    2009 Share Incentive Plan (incorporated by reference to Exhibit 10.15 of
our Registration Statement on Form F-1 (file No. 333-169839), as amended,
initially filed with the Securities and Exchange Commission on October 8,
2010)10.17
    
    
    Form of Indemnification Agreement (incorporated by reference to Exhibit
10.16 of our Registration Statement on Form F-1 (file No. 333-169839), as
amended, initially filed with the Securities and Exchange Commission on
October 8, 2010)10.18
    
    
    Form of Employment Agreement (incorporated by reference to Exhibit 10.17
of our Registration Statement on Form F-1 (file No. 333-169839), as
amended, initially filed with the Securities and Exchange Commission on
October 8, 2010)10.19
    
    
    English translation of Land Lease Contract between Agricultural
Development Office of Guyuan County, Hebei Province and Land V. Ltd
(Zhangjiakou) dated November 1, 2006 (incorporated by reference to Exhibit
10.18 of our Registration Statement on Form F-1 (file No. 333-169839), as
amended, initially filed with the Securities and Exchange Commission on
October 8, 2010)10.20
    
    
    English translation of Land Sub-Lease Contract between Cai Yingguo and
Land V. Ltd (Fujian) dated June 14, 2005 (incorporated by reference to
Exhibit 10.19 of our Registration Statement on Form F-1 (file No.
333-169839), as amended, initially filed with the Securities and Exchange
Commission on October 8, 2010)10.21
    
    
    English translation of Amendment Agreement To The Main Contract by and
among Cai Yingguo, Land V. Ltd (Fujian) and Linong Agriculture Technology
(Shantou) Co. Ltd dated June 25, 2010 (incorporated by reference to
Exhibit 10.20 of our Registration Statement on Form F-1 (file No.
333-169839), as amended, initially filed with the Securities and Exchange
Commission on October 8, 2010)10.22
    
    
    English translation of Technology Development Contract between China
Linong International Limited and Beijing Research Center for Information
Technology in Agriculture dated August 5, 2010 (incorporated by reference
to Exhibit 10.21 of our Registration Statement on Form F-1 (file No.
333-169839), as amended, initially filed with the Securities and Exchange
Commission on October 8, 2010)
  83




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##### Table of Contents



ExhibitNumber
    
    Description of Document11.1
    
    
    Code of Business Conduct and Ethics of the Registrant (incorporated by
reference to Exhibit 99.1 of our Registration Statement on Form F-1 (file
No. 333-169839), as amended, initially filed with the Securities and
Exchange Commission on October 15, 2010)12.1
    *
    
    CEO Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 200212.2
    *
    
    CFO Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 200213.1
    *
    
    CEO Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 200213.2
    *
    
    CFO Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 200215.1
    *
    
    Consent of Trend Associates15.2
    *
    
    Consent of KPMG, Independent Registered Public Accounting Firm
 
 *
    
    Filed with this annual report on Form 20-F.  84




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##### Table of Contents



SIGNATURES
  Le Gaga Holdings LimitedBy:
    
    /s/ Shing Yung MaName:
    
    Shing Yung MaTitle:
    
    Chairman and Chief Executive Officer
   85




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##### Table of Contents



LE GAGA HOLDINGS LIMITED
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
 PageConsolidated Financial StatementsReport of Independent Registered Public Accounting Firm
    
    
    F-2Consolidated Income Statements for the Years Ended March 31, 2009, 2010 and 2011
    
    
    F-3Consolidated Statements of Comprehensive Income for the Years Ended March 31, 2009, 2010 and 2011
    
    
    F-4Consolidated Balance Sheets as of March 31, 2009, 2010 and 2011
    
    
    F-5Consolidated Statements of Changes in Equity for the Years Ended March 31, 2009, 2010 and 2011
    
    
    F-6Consolidated Statements of Cash Flows for the Years Ended March 31, 2009, 2010 and 2011
    
    
    F-9Notes to the Consolidated Financial Statements
    
    
    F-11
  F-1




---



##### Table of Contents



Report of Independent Registered Public Accounting Firm
 
    
  F-2




---



##### Table of Contents



Le Gaga Holdings Limited
 
 Consolidated income statements
 for the years ended March 31, 2009, 2010 and 2011
 (Expressed in Renminbi)
 Note
    
    
    2009
    
    
    2010
    
    
    2011RMB000
    
    
    RMB000
    
    
    RMB000Revenue
    
    
    4
    
    
    
    198,995
    
    
    
    280,512
    
    
    
    406,772Cost of inventories sold
    
    
    18(b)
    
    
    
    (174,288
    )
    
    
    (238,277
    )
    
    
    (357,211
    )Changes in fair value less costs to sell related to:Crops harvested during the year
    
    
    
    
    
    
    80,795
    
    
    
    119,009
    
    
    
    186,183Growing crops on the farmland at the year end
    
    
    
    
    
    
    16,548
    
    
    
    33,734
    
    
    
    55,713Total changes in fair value less costs to sell of biological assets
    
    
    17(a)
    
    
    
    97,343
    
    
    
    152,743
    
    
    
    241,896Packing expenses
    
    
    
    
    
    
    (15,620
    )
    
    
    (18,281
    )
    
    
    (28,248
    )Land preparation costs
    
    
    7(c)
    
    
    
    (9,755
    )
    
    
    (12,434
    )
    
    
    (20,800
    )Other income
    
    
    5
    
    
    
    1,224
    
    
    
    626
    
    
    
    124Research and development expenses
    
    
    
    
    
    
    (5,855
    )
    
    
    (6,519
    )
    
    
    (7,298
    )Selling and distribution expenses
    
    
    
    
    
    
    (10,097
    )
    
    
    (18,207
    )
    
    
    (24,949
    )Administrative expenses
    
    
    
    
    
    
    (17,900
    )
    
    
    (25,059
    )
    
    
    (68,978
    )Other expenses
    
    
    5
    
    
    
    (3,980
    )
    
    
    (3,404
    )
    
    
    (6,070
    )Results from operating activities
    
    
    
    
    
    
    60,067
    
    
    
    111,700
    
    
    
    135,238Finance income
    
    
    
    
    
    
    546
    
    
    
    101
    
    
    
    2,881Finance costs
    
    
    
    
    
    
    
    
    
    
    (709
    )
    
    
    (4,643
    )Net finance income/(costs)
    
    
    6
    
    
    
    546
    
    
    
    (608
    )
    
    
    (1,762
    )Profit before taxation
    
    
    7
    
    
    
    60,613
    
    
    
    111,092
    
    
    
    133,476Income tax expense
    
    
    8(a)
    
    
    
    (200
    )
    
    
    (890
    )
    
    
    (101
    )Profit for the year
    
    
    
    
    
    
    60,413
    
    
    
    110,202
    
    
    
    133,375Earnings per ordinary/preferred share (in RMB cents)
    
    
    9Basic
    
    
    
    
    
    
    3.61
    
    
    
    6.52
    
    
    
    6.68Diluted
    
    
    
    
    
    
    3.57
    
    
    
    6.43
    
    
    
    6.46
   F-3




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##### Table of Contents



Le Gaga Holdings Limited
 
 Consolidated statements of comprehensive income
 for the years ended March 31, 2009, 2010 and 2011
 Expressed in Renminbi
 2009
    
    
    2010
    
    
    2011RMB000
    
    
    RMB000
    
    
    RMB000Profit for the year
    
    
    60,413
    
    
    
    110,202
    
    
    
    133,375Other comprehensive income for the year (net of income tax)Exchange differences on translation of financial
statements of entities outside the Peoples Republic of
China (the PRC)  mainland
    
    
    (3,429
    )
    
    
    (713
    )
    
    
    (12,486
    )Reclassification adjustment for release of exchange
reserve upon disposal of subsidiaries
    
    
    (1,529
    )
    
    
    (541
    )
    
    
    Total comprehensive income for the year
    
    
    55,455
    
    
    
    108,948
    
    
    
    120,889
   F-4




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##### Table of Contents



Le Gaga Holdings Limited
 
 Consolidated balance sheets
 at March 31, 2009, 2010 and 2011
 Expressed in Renminbi
 Note
    
    
    2009
    
    
    2010
    
    
    2011RMB000
    
    
    RMB000
    
    
    RMB000AssetsProperty, plant and equipment
    
    
    12
    
    
    
    239,093
    
    
    
    357,862
    
    
    
    575,246Construction in progress
    
    
    13
    
    
    
    18,988
    
    
    
    17,402
    
    
    
    24,294Lease prepayments
    
    
    14
    
    
    
    2,620
    
    
    
    2,516
    
    
    
    2,413Long-term deposits and prepayments
    
    
    15
    
    
    
    21,538
    
    
    
    31,559
    
    
    
    56,991Biological assets
    
    
    17
    
    
    
    2,993
    
    
    
    5,186
    
    
    
    6,049Total non-current assets
    
    
    
    
    
    
    285,232
    
    
    
    414,525
    
    
    
    664,993Biological assets
    
    
    17
    
    
    
    22,594
    
    
    
    45,005
    
    
    
    73,662Inventories
    
    
    18
    
    
    
    3,202
    
    
    
    2,938
    
    
    
    4,608Trade and other receivables
    
    
    19
    
    
    
    21,657
    
    
    
    36,779
    
    
    
    63,000Cash
    
    
    20
    
    
    
    107,939
    
    
    
    139,207
    
    
    
    598,722Total current assets
    
    
    
    
    
    
    155,392
    
    
    
    223,929
    
    
    
    739,992Total assets
    
    
    
    
    
    
    440,624
    
    
    
    638,454
    
    
    
    1,404,985Equity
    
    
    26Capital
    
    
    
    
    
    
    267,032
    
    
    
    307,689
    
    
    
    687,706Reserves
    
    
    
    
    
    
    157,634
    
    
    
    272,355
    
    
    
    592,041Total equity
    
    
    
    
    
    
    424,666
    
    
    
    580,044
    
    
    
    1,279,747LiabilitiesBank loan
    
    
    21(a)
    
    
    
    
    
    
    
    34,290
    
    
    
    78,835Loan from municipal government
    
    
    22
    
    
    
    1,000
    
    
    
    1,410
    
    
    
    Total non-current liabilities
    
    
    
    
    
    
    1,000
    
    
    
    35,700
    
    
    
    78,835Bank loan
    
    
    21(b)
    
    
    
    
    
    
    
    
    
    
    
    6,000Trade and other payables
    
    
    23
    
    
    
    11,766
    
    
    
    18,628
    
    
    
    36,321Current taxation
    
    
    25(a)
    
    
    
    3,192
    
    
    
    4,082
    
    
    
    4,082Total current liabilities
    
    
    
    
    
    
    14,958
    
    
    
    22,710
    
    
    
    46,403Total liabilities
    
    
    
    
    
    
    15,958
    
    
    
    58,410
    
    
    
    125,238Total equity and liabilities
    
    
    
    
    
    
    440,624
    
    
    
    638,454
    
    
    
    1,404,985
   F-5




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##### Table of Contents



Le Gaga Holdings Limited
 
 Consolidated statements of changes in equity
 for the years ended March 31, 2009, 2010 and 2011
 Expressed in Renminbi
 Share
    
    
    Share
    
    
    Statutory
    
    
    Exchange
    
    
    Capital
    
    
    Othercapital
    
    
    premium
    
    
    reserve
    
    
    reserve
    
    
    reserve
    
    
    reserve
    
    
    Retained(note 26(a))
    
    
    (note 26(b)(i))
    
    
    (note 26(b)(ii))
    
    
    (note 26(b)(iii))
    
    
    (note 26(b)(iv))
    
    
    (note 26(b)(v))
    
    
    earnings
    
    
    TotalRMB000
    
    
    RMB000
    
    
    RMB000
    
    
    RMB000
    
    
    RMB000
    
    
    RMB000
    
    
    RMB000
    
    
    RMB000At April 1, 2008
    
    
    14
    
    
    
    267,018
    
    
    
    12,137
    
    
    
    3,260
    
    
    
    5,162
    
    
    
    28,355
    
    
    
    50,125
    
    
    
    366,071Profit for the year
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    60,413
    
    
    
    60,413Other comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (4,958
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (4,958
    )Total comprehensive income
for the year
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (4,958
    )
    
    
    
    
    
    
    
    
    
    
    60,413
    
    
    
    55,455Equity settled share-based transactions
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,140
    
    
    
    
    
    
    
    
    
    
    
    3,140Disposal of subsidiaries
    
    
    
    
    
    
    
    
    
    
    (212
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    212
    
    
    
    Appropriations
    
    
    
    
    
    
    
    
    
    
    7,118
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (7,118
    )
    
    
    At March 31, 2009
    
    
    14
    
    
    
    267,018
    
    
    
    19,043
    
    
    
    (1,698
    )
    
    
    8,302
    
    
    
    28,355
    
    
    
    103,632
    
    
    
    424,666
   F-6




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##### Table of Contents



Le Gaga Holdings Limited
Consolidated statements of changes in equity
for the years ended March 31, 2009, 2010 and 2011 (continued)  Expressed in Renminbi
 Share
    
    
    Share
    
    
    Statutory
    
    
    Exchange
    
    
    Capital
    
    
    Othercapital
    
    
    premium
    
    
    reserve
    
    
    reserve
    
    
    reserve
    
    
    reserve
    
    
    Retained(note 26(a))
    
    
    (note 26(b)(i))
    
    
    (note 26(b)(ii))
    
    
    (note 26(b)(iii))
    
    
    (note 26(b)(iv))
    
    
    (note 26(b)(v))
    
    
    earnings
    
    
    TotalRMB000
    
    
    RMB000
    
    
    RMB000
    
    
    RMB000
    
    
    RMB000
    
    
    RMB000
    
    
    RMB000
    
    
    RMB000At April 1, 2009
    
    
    14
    
    
    
    267,018
    
    
    
    19,043
    
    
    
    (1,698
    )
    
    
    8,302
    
    
    
    28,355
    
    
    
    103,632
    
    
    
    424,666Profit for the year
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    110,202
    
    
    
    110,202Other comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,254
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,254
    )Total comprehensive income
for the year
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,254
    )
    
    
    
    
    
    
    
    
    
    
    110,202
    
    
    
    108,948Issue of preferred shares, net of issuing expense
    
    
    1
    
    
    
    40,656
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    40,657Equity settled share-based transactions
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,773
    
    
    
    
    
    
    
    
    
    
    
    5,773Disposal of a subsidiary
    
    
    
    
    
    
    
    
    
    
    (304
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    304
    
    
    
    Appropriations
    
    
    
    
    
    
    
    
    
    
    8,057
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (8,057
    )
    
    
    At March 31, 2010
    
    
    15
    
    
    
    307,674
    
    
    
    26,796
    
    
    
    (2,952
    )
    
    
    14,075
    
    
    
    28,355
    
    
    
    206,081
    
    
    
    580,044
   F-7




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##### Table of Contents



Le Gaga Holdings Limited
Consolidated statements of changes in equity
for the years ended March 31, 2009, 2010 and 2011 (continued)  Expressed in Renminbi
 Share
    
    
    Share
    
    
    Statutory
    
    
    Exchange
    
    
    Capital
    
    
    Othercapital
    
    
    premium
    
    
    reserve
    
    
    reserve
    
    
    reserve
    
    
    reserve
    
    
    Retained(note 26(a))
    
    
    (note 26(b)(i))
    
    
    (note 26(b)(ii))
    
    
    (note 26(b)(iii))
    
    
    (note 26(b)(iv))
    
    
    (note 26(b)(v))
    
    
    earnings
    
    
    TotalRMB000
    
    
    RMB000
    
    
    RMB000
    
    
    RMB000
    
    
    RMB000
    
    
    RMB000
    
    
    RMB000
    
    
    RMB000At April 1, 2010
    
    
    15
    
    
    
    307,674
    
    
    
    26,796
    
    
    
    (2,952
    )
    
    
    14,075
    
    
    
    28,355
    
    
    
    206,081
    
    
    
    580,044Profit for the year
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    133,375
    
    
    
    133,375Other comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (12,486
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (12,486
    )Total comprehensive income for the year
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (12,486
    )
    
    
    
    
    
    
    
    
    
    
    133,375
    
    
    
    120,889Arising from the Reorganization
    
    
    118,762
    
    
    
    (307,674
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    188,912
    
    
    
    
    
    
    
    Exercise of share options
    
    
    5,383
    
    
    
    28,655
    
    
    
    
    
    
    
    
    
    
    
    (11,793
    )
    
    
    
    
    
    
    
    
    
    
    22,245Equity settled share-based transactions
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    21,678
    
    
    
    
    
    
    
    
    
    
    
    21,678Issue of ordinary shares, net of issuing costs
    
    
    30,778
    
    
    
    504,113
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    534,891Appropriations
    
    
    
    
    
    
    
    
    
    
    14,473
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (14,473
    )
    
    
    At March 31, 2011
    
    
    154,938
    
    
    
    532,768
    
    
    
    41,269
    
    
    
    (15,438
    )
    
    
    23,960
    
    
    
    217,267
    
    
    
    324,983
    
    
    
    1,279,747
   F-8




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##### Table of Contents



Le Gaga Holdings Limited
 
 Consolidated statements of cash flows
 for the years ended March 31, 2009, 2010 and 2011
 Expressed in Renminbi
 Note
    
    
    2009
    
    
    2010
    
    
    2011RMB000
    
    
    RMB000
    
    
    RMB000Operating activitiesProfit before taxation
    
    
    
    
    
    
    60,613
    
    
    
    111,092
    
    
    
    133,476Adjustments for:Amortization of lease prepayments
    
    
    
    
    
    
    87
    
    
    
    104
    
    
    
    103Depreciation
    
    
    
    
    
    
    24,464
    
    
    
    35,057
    
    
    
    47,406Bad debt expense
    
    
    
    
    
    
    130
    
    
    
    
    
    
    
    Equity settled share-based transactions
    
    
    
    
    
    
    3,140
    
    
    
    5,773
    
    
    
    21,678Changes in fair value less costs to sell of biological assets
    
    
    
    
    
    
    (97,343
    )
    
    
    (152,743
    )
    
    
    (241,896
    )Interest income
    
    
    
    
    
    
    (190
    )
    
    
    (101
    )
    
    
    (254
    )Interest expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,643Gain on disposal of subsidiaries
    
    
    27
    
    
    
    (1,130
    )
    
    
    (540
    )
    
    
    Net loss on disposal of property, plant and equipment
    
    
    
    
    
    
    1,738
    
    
    
    3,142
    
    
    
    5,143Foreign exchange gain
    
    
    
    
    
    
    (4,498
    )
    
    
    (529
    )
    
    
    (2,261
    )(12,989
    )
    
    
    1,255
    
    
    
    (31,962
    )Changes in current biological assets due to plantations
    
    
    
    
    
    
    (71,715
    )
    
    
    (99,854
    )
    
    
    (134,070
    )Changes in inventories, net of effect of harvested crops
transferred to inventories
    
    
    
    
    
    
    171,603
    
    
    
    228,881
    
    
    
    346,468Increase in trade and other receivables
    
    
    
    
    
    
    (14,784
    )
    
    
    (8,252
    )
    
    
    (35,310
    )Increase in long-term deposits and prepayments
    
    
    
    
    
    
    (10,127
    )
    
    
    (10,021
    )
    
    
    (21,025
    )(Decrease)/increase in trade and other payables
    
    
    
    
    
    
    (11,068
    )
    
    
    5,592
    
    
    
    5,459Cash generated from operations
    
    
    
    
    
    
    50,920
    
    
    
    117,601
    
    
    
    129,560Income tax paid
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (101
    )Net cash generated from operating activities
    
    
    
    
    
    
    50,920
    
    
    
    117,601
    
    
    
    129,459
  F-9




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##### Table of Contents



Le Gaga Holdings Limited
Consolidated statements of cash flows
for the years ended March 31, 2009, 2010 and 2011 (continued)  Expressed in Renminbi
 Note
    
    
    2009
    
    
    2010
    
    
    2011RMB000
    
    
    RMB000
    
    
    RMB000Investing activitiesInterest received
    
    
    
    
    
    
    190
    
    
    
    101
    
    
    
    254Plantations of non-current biological assets
    
    
    
    
    
    
    (843
    )
    
    
    (624
    )
    
    
    (1,692
    )Payment for the purchase of property, plant and equipment
    
    
    
    
    
    
    (10,673
    )
    
    
    (6,122
    )
    
    
    (9,520
    )Payment for lease prepayments
    
    
    
    
    
    
    (1,482
    )
    
    
    
    
    
    
    Payment for construction in progress
    
    
    
    
    
    
    (124,353
    )
    
    
    (161,378
    )
    
    
    (262,704
    )Net cash outflow from disposal of subsidiaries
    
    
    
    
    
    
    (23
    )
    
    
    
    
    
    
    Proceeds from disposal of property, plant and equipment
    
    
    
    
    
    
    1,294
    
    
    
    7,658
    
    
    
    13,411Net cash used in investing activities
    
    
    
    
    
    
    (135,890
    )
    
    
    (160,365
    )
    
    
    (260,251
    )Financing activitiesAdvance from a director
    
    
    
    
    
    
    58
    
    
    
    
    
    
    
    Repayment to a director
    
    
    
    
    
    
    (14,526
    )
    
    
    
    
    
    
    (40
    )Proceeds from municipal government loan
    
    
    
    
    
    
    1,000
    
    
    
    410
    
    
    
    Repayment of municipal government loan
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,410
    )Interest paid
    
    
    
    
    
    
    
    
    
    
    (1,133
    )
    
    
    (5,803
    )Proceeds from bank loans
    
    
    
    
    
    
    
    
    
    
    34,300
    
    
    
    53,632Net proceeds from issue of preferred shares
    
    
    
    
    
    
    122,239
    
    
    
    40,657
    
    
    
    Proceeds received from exercise of share options
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    22,245Net proceeds from issue of ordinary shares, net of issuing costs
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    534,891Net cash generated from financing activities
    
    
    
    
    
    
    108,771
    
    
    
    74,234
    
    
    
    603,515Net increase in cash
    
    
    
    
    
    
    23,801
    
    
    
    31,470
    
    
    
    472,723Cash at April 1
    
    
    
    
    
    
    85,360
    
    
    
    107,939
    
    
    
    139,207Effect of foreign exchange rate changes
    
    
    
    
    
    
    (1,222
    )
    
    
    (202
    )
    
    
    (13,208
    )Cash at March 31
    

    20
    
    
    
    107,939
    
    
    
    139,207
    
    
    
    598,722
   F-10




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##### Table of Contents



Le Gaga Holdings Limited
 
 Notes to the consolidated financial statements
 (Expressed in Renminbi unless otherwise indicated)
 1
    
    Principal activities and reorganization
    2
    
    Significant accounting policies
 (a)
    
    Statement of compliance
   (b)
    
    Basis of preparation of the financial statements
   
    
    biological assets (see note 2(k))
    
    derivative financial instruments (see note 2(d))
  F-11




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##### Table of Contents



Le Gaga Holdings Limited
Notes to the consolidated financial statements (continued)  (Expressed in Renminbi unless otherwise indicated)
 2
    
    Significant accounting policies (continued)(b)
    
    Basis of preparation of the financial statements (continued)
    (c)
    
    Subsidiaries
   (d)
    
    Derivative financial instruments
  (e)
    
    Cash and cash equivalents
  (f)
    
    Property, plant and equipment
    Land improvements, buildings and farmland infrastructure
    
    Shorter of the unexpired term of land leases and their estimated useful lives of 3 to 30 yearsEquipment and machinery
    
    3 to 10 yearsMotor vehicles
    
    3 to 10 yearsFurniture, fixtures and computer equipment
    
    5 years
  F-12




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##### Table of Contents



Le Gaga Holdings Limited
Notes to the consolidated financial statements (continued)  (Expressed in Renminbi unless otherwise indicated)
 2
    
    Significant accounting policies (continued)(f)
    
    Property, plant and equipment (continued)
   (g)
    
    Construction in progress
   (h)
    
    Lease prepayments
  (i)      Leased assets
  (i)
    
    Classification of assets leased to the Group
  (ii)
    
    Operating lease charges
    F-13




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##### Table of Contents



Le Gaga Holdings Limited
Notes to the consolidated financial statements (continued)  (Expressed in Renminbi unless otherwise indicated)
 2
    
    Significant accounting policies (continued)(j)
    
    Impairment of assets
 (i)
    
    Impairment of receivables
  
    
    significant financial difficulty of the debtor;
    
    a breach of contract, such as a default or delinquency in interest or principal payments;
    
    it becoming probable that the debtor will enter bankruptcy or other financial reorganization; and
    
    significant changes in the technological, market, economic or legal
environment that have an adverse effect on the debtor.
  
    
    For trade and other current receivables carried at amortized cost, the
impairment loss is measured as the difference between the assets carrying amount and
the present value of estimated future cash flows, discounted at the financial assets
original effective interest rate (i.e. the effective interest rate computed at initial
recognition of these assets), where the effect of discounting is material. This
assessment is made collectively where financial assets carried at amortized cost share
similar risk characteristics, such as similar past due status, and have not been
individually assessed as impaired. Future cash flows for financial assets which are
assessed for impairment collectively are based on historical loss experience for assets
with credit risk characteristics similar to the collective group.
  (ii)
    
    Impairment of other assets
  
    
    property, plant and equipment;
    
    construction in progress;
    
    lease prepayments; and
    
    long-term deposits and prepayments.
   F-14




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##### Table of Contents



Le Gaga Holdings Limited
Notes to the consolidated financial statements (continued)  (Expressed in Renminbi unless otherwise indicated)
 2
    
    Significant accounting policies (continued)(j)
    
    Impairment of assets (continued)
 (ii)
    
    Impairment of other assets (continued)
 
    
    Calculation of recoverable amount
  
    
    Recognition of impairment losses
  
    
    Reversals of impairment losses
  (k)
    
    Biological assets
   (l)
    
    Inventories
    F-15




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##### Table of Contents



Le Gaga Holdings Limited
Notes to the consolidated financial statements (continued)  (Expressed in Renminbi unless otherwise indicated)
 2
    
    Significant accounting policies (continued)(l)
    
    Inventories (continued)
  (m)
    
    Preferred share capital
  (n)
    
    Trade and other receivables
  (o)
    
    Interest-bearing borrowings
  (p)
    
    Trade and other payables
  (q)
    
    Employee benefits
 (i)
    
    Short term employee benefits and contributions to defined contribution retirement plans
  (ii)
    
    Share-based payments
    F-16




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##### Table of Contents



Le Gaga Holdings Limited
Notes to the consolidated financial statements (continued)  (Expressed in Renminbi unless otherwise indicated)
 2
    
    Significant accounting policies (continued)(r)
    
    Income tax
         
    
    in the case of current tax assets and liabilities, the Group intends either
to settle on a net basis, or to realize the asset and settle the liability
simultaneously; or
 
    
    in the case of deferred tax assets and liabilities, if they relate to income
taxes levied by the same taxation authority on either:
 
    
    the same taxable entity; or
 
    
    different taxable entities, which, in each future period in which
significant amounts of deferred tax liabilities or assets are expected to be settled or
recovered, intend to realize the current tax assets and settle the current tax
liabilities on a net basis or realize and settle simultaneously.
  F-17




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##### Table of Contents



Le Gaga Holdings Limited
Notes to the consolidated financial statements (continued)  (Expressed in Renminbi unless otherwise indicated)
 
 2
    
    Significant accounting policies (continued)(s)
    
    Provisions and contingent liabilities
   (t)
    
    Revenue recognition
  (i)
    
    Sale of goods
  (ii)
    
    Interest income
  (iii)
    
    Government grants
   (u)
    
    Translation of foreign currencies
     F-18




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##### Table of Contents



Le Gaga Holdings Limited
Notes to the consolidated financial statements (continued)  (Expressed in Renminbi unless otherwise indicated)
 2
    
    Significant accounting policies (continued)(u)
    
    Translation of foreign currencies (continued)
   (v)
    
    Research and development costs
  (w)
    
    Borrowing costs
   (x)
    
    Related parties
  (i)
    
    the party has the ability, directly or indirectly through one or more
intermediaries, to control the Group or exercise significant influence over the Group in
making financial and operating policy decisions, or has joint control over the Group;
 (ii)
    
    the Group and the party are subject to common control;
 (iii)
    
    the party is an associate of the Group or a joint venture in which the Group is
a venturer;
 (iv)
    
    the party is a member of key management personnel of the Group or the Groups
parent, or a close family member of such an individual, or is an entity under the
control, joint control or significant influence of such individuals;
 (v)
    
    the party is a close family member of a party referred to in (i) or is an entity
under the control, joint control or significant influence of such individuals; or
 (vi)
    
    the party is a post-employment benefit plan which is for the benefit of employees
of the Group or of any entity that is a related party of the Group.
  (y)
    
    Earnings per share
    F-19




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##### Table of Contents



Le Gaga Holdings Limited
Notes to the consolidated financial statements (continued)  (Expressed in Renminbi unless otherwise indicated)
 2
    
    Significant accounting policies (continued)(y)
    
    Earnings per share (continued)
   (z)
    
    Segment reporting
  3
    
    Changes in accounting policies
 (a)
 
    
    IFRS 3 (revised 2008), Business combinations
    
    Amendments to IAS 27, Consolidated and separate financial statements
    
    Improvements to IFRSs (2009)
 (see note 32).
  
    
    The impact of the majority of the revisions to IFRS 3 and
IAS 27 have not yet had any effect on the Groups consolidated
financial statements as these changes will first be effective
as and when the Group enters into a relevant transaction (for
example, a business combination or a disposal of a subsidiary)
and there is no requirement to restate the amounts recorded in
respect of such previous transactions.
    
    The amendments to IFRS 3 (in respect of recognition of
acquirees deferred tax assets) and IAS 27 (in respect of
allocation of losses to non-controlling interests (previously
known as minority interests) in excess of their equity
interest) have had no material impact as the Group has not
acquired any business and does not have any non-controlling
interests in the current or comparative periods and no such
deferred tax assets or losses arose in the current year.
 (b)
  F-20




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##### Table of Contents



Le Gaga Holdings Limited
Notes to the consolidated financial statements (continued)  (Expressed in Renminbi unless otherwise indicated)
 4
    
    Revenue
   2009
    
    
    2010
    
    
    2011RMB000
    
    
    RMB000
    
    
    RMB000Wholesalers
    
    
    94,537
    
    
    
    137,546
    
    
    
    213,974Institutional customers
    
    
    77,284
    
    
    
    100,969
    
    
    
    149,131Supermarkets
    
    
    26,845
    
    
    
    41,235
    
    
    
    43,099Others
    
    
    329
    
    
    
    762
    
    
    
    568198,995
    
    
    
    280,512
    
    
    
    406,772
   5
    
    Other income and other expenses
 2009
    
    
    2010
    
    
    2011RMB000
    
    
    RMB000
    
    
    RMB000Other incomeGain on disposal of subsidiaries (note 27)
    
    
    1,130
    
    
    
    540
    
    
    
    Sundry income
    
    
    94
    
    
    
    86
    
    
    
    1241,224
    
    
    
    626
    
    
    
    124Other expensesNet loss on disposal of property, plant
and equipment
    
    
    (1,738
    )
    
    
    (3,142
    )
    
    
    (5,143
    )Natural disasters losses
    
    
    (2,005
    )
    
    
    (237
    )
    
    
    (481
    )Others
    
    
    (237
    )
    
    
    (25
    )
    
    
    (446
    )(3,980
    )
    
    
    (3,404
    )
    
    
    (6,070
    )
  F-21




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##### Table of Contents



Le Gaga Holdings Limited
Notes to the consolidated financial statements (continued)  (Expressed in Renminbi unless otherwise indicated)
 6
    
    Finance income and finance costs recognized in profit or loss
 2009
    
    
    2010
    
    
    2011RMB000
    
    
    RMB000
    
    
    RMB000Finance incomeInterest income on bank deposits
    
    
    190
    
    
    
    101
    
    
    
    254Net foreign exchange gain
    
    
    356
    
    
    
    
    
    
    
    2,627546
    
    
    
    101
    
    
    
    2,881Finance costsInterest on bank loans
    
    
    
    
    
    
    (1,133
    )
    
    
    (9,040
    )Net foreign exchange loss
    
    
    
    
    
    
    (709
    )
    
    
    
    
    
    
    (1,842
    )
    
    
    (9,040
    )Less: interest expense
capitalized into construction
in progress
    
    
    
    
    
    
    1,133
    
    
    
    4,397
    
    
    
    (709
    )
    
    
    (4,643
    )Net finance income/(costs)
recognized in profit or loss
    
    
    546
    
    
    
    (608
    )
    
    
    (1,762
    )
 7
    
    Profit before taxation
  2009
    
    
    2010
    
    
    2011RMB000
    
    
    RMB000
    
    
    RMB000(a) Staff costsContributions to defined contribution
retirement plans
    
    
    312
    
    
    
    502
    
    
    
    701Equity settled share-based payment expenses
    
    
    3,140
    
    
    
    4,096
    
    
    
    19,460Salaries, wages and other benefits
    
    
    27,861
    
    
    
    38,275
    
    
    
    56,47431,313
    
    
    
    42,873
    
    
    
    76,635(b) Other itemsAmortization of lease prepayments
    
    
    87
    
    
    
    104
    
    
    
    103Depreciation
    
    
    24,464
    
    
    
    35,057
    
    
    
    47,406Equity settled share-based payment
expenses in respect of the Companys
consultants
    
    
    
    
    
    
    1,677
    
    
    
    2,218Bad debt expense
    
    
    130
    
    
    
    
    
    
    
    Auditors remuneration
    
    
    1,489
    
    
    
    1,774
    
    
    
    3,869Operating lease charges: minimum lease
payments in respect of premises
    
    
    9,002
    
    
    
    9,273
    
    
    
    9,996
 (c)
    
    Land preparation costs
   F-22




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##### Table of Contents



Le Gaga Holdings Limited
Notes to the consolidated financial statements (continued)  (Expressed in Renminbi unless otherwise indicated)
 8
    
    Income tax in the consolidated income statements
 (a)
    
    Taxation in the consolidated income statements represents:
 2009
    
    
    2010
    
    
    2011RMB000
    
    
    RMB000
    
    
    RMB000Current taxPRC withholding tax on dividends
    
    
    
    
    
    
    607
    
    
    
    101PRC withholding tax on capital gains
    
    
    200
    
    
    
    283
    
    
    
    200
    
    
    
    890
    
    
    
    101
 (b)
    
    Reconciliation between tax expense and accounting profit at applicable tax rates:
 2009
    
    
    2010
    
    
    2011RMB000
    
    
    RMB000
    
    
    RMB000Profit before taxation
    
    
    60,613
    
    
    
    111,092
    
    
    
    133,476Notional tax on profit before taxation,
calculated at the rates applicable to the tax
jurisdictions concerned (Note (i))
    
    
    16,983
    
    
    
    35,178
    
    
    
    47,812Effect of non-taxable income
    
    
    (434
    )
    
    
    (4,429
    )
    
    
    (110
    )Effect of non-deductible expenses
    
    
    49
    
    
    
    14
    
    
    
    26Effect of tax concessions (Note (ii))
    
    
    (17,774
    )
    
    
    (32,906
    )
    
    
    (48,570
    )Effect of tax loss not recognized
(Note (iii))
    
    
    1,176
    
    
    
    2,143
    
    
    
    842PRC withholding tax on dividends
(Note (iv))
    
    
    
    
    
    
    607
    
    
    
    101PRC withholding tax on capital gains (Note (v))
    
    
    200
    
    
    
    283
    
    
    
    Actual tax expense
    
    
    200
    
    
    
    890
    
    
    
    101
  (i)
    
    Pursuant to the rules and regulations of the Cayman Islands and the British
Virgin Islands (BVI), the Group is not subject to any tax on income or capital gains
in the Cayman Islands and the BVI.The Hong Kong profits tax rate for the years ended March 31, 2009, 2010 and 2011 is
16.5%. The payments of dividends by Hong Kong companies are not subject to any Hong
Kong withholding tax.Effective from January 1, 2008, the PRCs statutory income tax rate is 25%.(ii)
    
    According to the PRCs new Income Tax Law and its relevant regulations,
effective from January 1, 2008, the PRC statutory income tax rate is 25%, however, the
Groups PRC subsidiaries which are engaged in growing, processing and sales of
agricultural products are exempt from PRC income tax.(iii)
    
    No provision for Hong Kong profits tax was made as the Groups subsidiaries
operating in Hong Kong sustained tax losses for the years ended March 31, 2009, 2010
and 2011.No provision for PRC income tax was made for Linong Agriculture Technology (Shenzhen)
Co. Limited, which is engaged in the sales of agricultural products, as it sustained
tax losses for the years ended March 31, 2009, 2010 and 2011. In addition, no
provision for PRC income tax was made for Land V. Limited (Weifang) which was disposed
in March 2009 as it sustained tax losses prior to the disposal. 
  F-23




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##### Table of Contents



Le Gaga Holdings Limited
Notes to the consolidated financial statements (continued)  (Expressed in Renminbi unless otherwise indicated)
 
 8
    
    Income tax in the consolidated income statements (continued)(b)
    
    Reconciliation between tax expense and accounting profit at applicable tax rates (continued):
 Notes: (continued)(iv)
    
    Pursuant to the PRCs new Income Tax Law and its relevant regulations,
dividends payable to foreign corporate investors are subject to a 10% withholding tax
for earnings generated since January 1, 2008. Under the Mainland China/ Hong Kong
Special Administrative Region (HKSAR) taxation arrangement, a qualified Hong Kong
tax resident which is the beneficial owner and holds 25% or more of the equity
interest in a PRC-resident enterprise is entitled to a reduced withholding rate of 5%.During the year ended March 31, 2010, Linong Agriculture Technology (Liaoyang) Co.
Limited declared a dividend of RMB23,000,000 to its immediate holding company, Land V.
Limited. Included in the dividend payable to Land V. Limited, an amount of
RMB12,148,000 was distributed from earnings generated since January 1, 2008 which is
subject to 5% PRC dividend withholding tax.(v)
    
    During the year ended March 31, 2010, Land V. Limited disposed of its equity
interest in Land V. Limited (Tianjin), with a gain of RMB2,825,000 for PRC tax purpose
which is subject to 10% PRC capital gain withholding tax. During the year ended March
31, 2009, Land V. Limited disposed of its equity interest in Land V. Limited (Weifang)
and Land V. Limited (Hangzhou), with a gain of RMB2,002,000 for PRC tax purpose which
is subject to 10% PRC capital gain withholding tax. 9
    
    Earnings per ordinary/preferred share
 (a)
    
    Basic earnings per ordinary/preferred share
     2009
    
    
    2010
    
    
    2011Issued ordinary and preferred shares
at April 1
    
    
    1,674,870
    
    
    
    1,674,870
    
    
    
    1,753,997Preferred shares issued
    
    
    
    
    
    
    15,609
    
    
    
    1,674,870
    
    
    
    1,690,479
    
    
    
    1,753,997Effect of share exchange in connection
with the Reorganization
    
    
    1,673,195,130
    
    
    
    1,688,788,521
    
    
    
    1,752,243,003Effect of share options exercised
    
    
    
    
    
    
    
    
    
    
    50,997,000Effect of shares issued under IPO
    
    
    
    
    
    
    
    
    
    
    192,822,000Weighted average number of ordinary
and preferred shares at March 31
    
    
    1,674,870,000
    
    
    
    1,690,479,000
    
    
    
    1,997,816,000
  F-24




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##### Table of Contents



Le Gaga Holdings Limited
Notes to the consolidated financial statements (continued)  (Expressed in Renminbi unless otherwise indicated)
 9
    
    Earnings per ordinary/preferred share (continued)(b)
    
    Diluted earnings per ordinary/preferred share
   2009
    
    
    2010
    
    
    2011Weighted average
number of ordinary and
preferred shares at
March 31
    
    
    1,674,870,000
    
    
    
    1,690,479,000
    
    
    
    1,997,816,000Effect of deemed issue
of shares under the
Companys share option
schemes
    
    
    18,018,000
    
    
    
    23,906,000
    
    
    
    68,160,000Weighted average
number of ordinary and
preferred shares
(diluted) at March 31
    
    
    1,692,888,000
    
    
    
    1,714,385,000
    
    
    
    2,065,976,000
   F-25




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##### Table of Contents



Le Gaga Holdings Limited
Notes to the consolidated financial statements (continued)  (Expressed in Renminbi unless otherwise indicated)
 10
    
    Segment information
  (i)
    
    Vegetables business (PRC-mainland/Hong Kong)Vegetables business consists of the cultivating, processing and distribution of vegetables.(ii)
    
    Trees business (PRC-mainland)Trees business consists of the cultivating, processing and distribution of fruits and tea leaf from its fruit and tea trees, and cultivating and selling of fir trees.
  (a)
    
    Analysis of segment results
 2009
    
    
    2010
    
    
    2011Vegetables
    
    
    Trees
    
    
    Total
    
    
    Vegetables
    
    
    Trees
    
    
    Total
    
    
    Vegetables
    
    
    Trees
    
    
    TotalRMB000
    
    
    RMB000
    
    
    RMB000
    
    
    RMB000
    
    
    RMB000
    
    
    RMB000
    
    
    RMB000
    
    
    RMB000
    
    
    RMB000Segment revenue
    
    
    198,995
    
    
    
    
    
    
    
    198,995
    
    
    
    279,852
    
    
    
    660
    
    
    
    280,512
    
    
    
    405,398
    
    
    
    1,374
    
    
    
    406,772Segment profit
    
    
    95,954
    
    
    
    
    
    
    
    95,954
    
    
    
    146,649
    
    
    
    346
    
    
    
    146,995
    
    
    
    217,476
    
    
    
    905
    
    
    
    218,381Depreciation and amortization
    
    
    (23,719
    )
    
    
    
    
    
    
    (23,719
    )
    
    
    (33,723
    )
    
    
    (81
    )
    
    
    (33,804
    )
    
    
    (45,425
    )
    
    
    (154
    )
    
    
    (45,579
    )
  F-26




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##### Table of Contents



Le Gaga Holdings Limited
Notes to the consolidated financial statements (continued)  (Expressed in Renminbi unless otherwise indicated)
 10
    
    Segment information (continued)(b)
    
    Reconciliation of segment profit
  2009
    
    
    2010
    
    
    2011RMB000
    
    
    RMB000
    
    
    RMB000Segment profit
    
    
    95,954
    
    
    
    146,995
    
    
    
    218,381Other income
    
    
    1,224
    
    
    
    626
    
    
    
    124Research and development expenses
    
    
    (5,855
    )
    
    
    (6,519
    )
    
    
    (7,298
    )Selling and distribution expenses
    
    
    (10,097
    )
    
    
    (18,207
    )
    
    
    (24,949
    )Administrative expenses
    
    
    (17,900
    )
    
    
    (25,059
    )
    
    
    (68,978
    )Other expenses
    
    
    (1,975
    )
    
    
    (3,167
    )
    
    
    (5,590
    )Net finance income/(costs)
    
    
    546
    
    
    
    (608
    )
    
    
    (1,762
    )Biological assets fair value adjustment
    
    
    (1,284
    )
    
    
    17,031
    
    
    
    23,548Profit before taxation
    
    
    60,613
    
    
    
    111,092
    
    
    
    133,476
 (c)
    
    Geographical information
   11
    
    Employee retirement benefits
 Defined contribution retirement schemes
     F-27




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##### Table of Contents



Le Gaga Holdings Limited
Notes to the consolidated financial statements (continued)  (Expressed in Renminbi unless otherwise indicated)
 12     Property, plant and equipment
 Buildings
    
    
    
    
    
    
    
    
    
    
    Furniture,and
    
    
    Equipment
    
    
    
    
    
    
    fixtures andLand
    
    
    farmland
    
    
    and
    
    
    Motor
    
    
    computerimprovements
    
    
    infrastructure
    
    
    machinery
    
    
    vehicles
    
    
    equipment
    
    
    TotalRMB000
    
    
    RMB000
    
    
    RMB000
    
    
    RMB000
    
    
    RMB000
    
    
    RMB000Cost:As at April 1, 2008
    
    
    28,681
    
    
    
    106,654
    
    
    
    4,401
    
    
    
    4,770
    
    
    
    1,053
    
    
    
    145,559Exchange adjustments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (60
    )
    
    
    (2
    )
    
    
    (62
    )Additions
    
    
    
    
    
    
    249
    
    
    
    10,002
    
    
    
    7
    
    
    
    415
    
    
    
    10,673Transfer from construction in
progress (note 13)
    
    
    26,655
    
    
    
    104,021
    
    
    
    2,775
    
    
    
    
    
    
    
    
    
    
    
    133,451Disposals through disposals of subsidiaries
    
    
    
    
    
    
    
    
    
    
    (77
    )
    
    
    (153
    )
    
    
    (40
    )
    
    
    (270
    ) others
    
    
    (2,121
    )
    
    
    (5,315
    )
    
    
    (52
    )
    
    
    (1,115
    )
    
    
    
    
    
    
    (8,603
    )As at March 31, 2009
    
    
    53,215
    
    
    
    205,609
    
    
    
    17,049
    
    
    
    3,449
    
    
    
    1,426
    
    
    
    280,748Accumulated depreciation:As at April 1, 2008
    
    
    3,574
    
    
    
    12,608
    
    
    
    1,280
    
    
    
    1,825
    
    
    
    329
    
    
    
    19,616Exchange adjustments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (25
    )
    
    
    (1
    )
    
    
    (26
    )Charge for the year
    
    
    5,995
    
    
    
    13,672
    
    
    
    3,971
    
    
    
    619
    
    
    
    207
    
    
    
    24,464Written back on disposals through disposals of subsidiaries
    
    
    
    
    
    
    
    
    
    
    (26
    )
    
    
    (57
    )
    
    
    (15
    )
    
    
    (98
    ) others
    
    
    (440
    )
    
    
    (1,484
    )
    
    
    (107
    )
    
    
    (261
    )
    
    
    (9
    )
    
    
    (2,301
    )As at March 31, 2009
    
    
    9,129
    
    
    
    24,796
    
    
    
    5,118
    
    
    
    2,101
    
    
    
    511
    
    
    
    41,655Net book value:As at March 31, 2009
    
    
    44,086
    
    
    
    180,813
    
    
    
    11,931
    
    
    
    1,348
    
    
    
    915
    
    
    
    239,093
  F-28




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##### Table of Contents



Le Gaga Holdings Limited
Notes to the consolidated financial statements (continued)  (Expressed in Renminbi unless otherwise indicated)
 12
    
    Property, plant and equipment (continued)
 Buildings
    
    
    
    
    
    
    
    
    
    
    Furniture,and
    
    
    Equipment
    
    
    
    
    
    
    fixtures andLand
    
    
    farmland
    
    
    and
    
    
    Motor
    
    
    computerimprovements
    
    
    infrastructure
    
    
    machinery
    
    
    vehicles
    
    
    equipment
    
    
    TotalRMB000
    
    
    RMB000
    
    
    RMB000
    
    
    RMB000
    
    
    RMB000
    
    
    RMB000Cost:As at April 1, 2009
    
    
    53,215
    
    
    
    205,609
    
    
    
    17,049
    
    
    
    3,449
    
    
    
    1,426
    
    
    
    280,748Exchange adjustments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5
    )
    
    
    
    
    
    
    (5
    )Additions
    
    
    800
    
    
    
    600
    
    
    
    4,138
    
    
    
    274
    
    
    
    312
    
    
    
    6,124Transfer from
construction in progress
(note 13)
    
    
    47,331
    
    
    
    114,294
    
    
    
    3,738
    
    
    
    
    
    
    
    
    
    
    
    165,363Disposals
    
    
    (6,027
    )
    
    
    (17,875
    )
    
    
    (1,243
    )
    
    
    (328
    )
    
    
    (367
    )
    
    
    (25,840
    )As at March 31, 2010
    
    
    95,319
    
    
    
    302,628
    
    
    
    23,682
    
    
    
    3,390
    
    
    
    1,371
    
    
    
    426,390Accumulated depreciation:As at April 1, 2009
    
    
    9,129
    
    
    
    24,796
    
    
    
    5,118
    
    
    
    2,101
    
    
    
    511
    
    
    
    41,655Exchange adjustments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (4
    )
    
    
    
    
    
    
    (4
    )Charge for the year
    
    
    7,304
    
    
    
    21,716
    
    
    
    5,391
    
    
    
    371
    
    
    
    275
    
    
    
    35,057Written back on disposals
    
    
    (1,399
    )
    
    
    (5,398
    )
    
    
    (898
    )
    
    
    (277
    )
    
    
    (208
    )
    
    
    (8,180
    )As at March 31, 2010
    
    
    15,034
    
    
    
    41,114
    
    
    
    9,611
    
    
    
    2,191
    
    
    
    578
    
    
    
    68,528Net book value:As at March 31, 2010
    
    
    80,285
    
    
    
    261,514
    
    
    
    14,071
    
    
    
    1,199
    
    
    
    793
    
    
    
    357,862
  F-29




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##### Table of Contents



Le Gaga Holdings Limited
Notes to the consolidated financial statements (continued)  (Expressed in Renminbi unless otherwise indicated)
 12
    
    Property, plant and equipment (continued)
 Buildings
    
    
    
    
    
    
    
    
    
    
    Furniture,and
    
    
    Equipment
    
    
    
    
    
    
    fixtures andLand
    
    
    farmland
    
    
    and
    
    
    Motor
    
    
    computerimprovements
    
    
    infrastructure
    
    
    machinery
    
    
    vehicles
    
    
    equipment
    
    
    TotalRMB000
    
    
    RMB000
    
    
    RMB000
    
    
    RMB000
    
    
    RMB000
    
    
    RMB000Cost:As at April 1, 2010
    
    
    95,319
    
    
    
    302,628
    
    
    
    23,682
    
    
    
    3,390
    
    
    
    1,371
    
    
    
    426,390Exchange adjustments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (46
    )
    
    
    (14
    )
    
    
    (60
    )Additions
    
    
    160
    
    
    
    231
    
    
    
    7,710
    
    
    
    561
    
    
    
    858
    
    
    
    9,520Transfer from
construction in progress
(note 13)
    
    
    43,456
    
    
    
    225,456
    
    
    
    515
    
    
    
    
    
    
    
    
    
    
    
    269,427Disposals
    
    
    (2,201
    )
    
    
    (15,308
    )
    
    
    (1,303
    )
    
    
    (1,189
    )
    
    
    (250
    )
    
    
    (20,251
    )As at March 31, 2011
    
    
    136,734
    
    
    
    513,007
    
    
    
    30,604
    
    
    
    2,716
    
    
    
    1,965
    
    
    
    685,026Accumulated depreciation:As at April 1, 2010
    
    
    15,034
    
    
    
    41,114
    
    
    
    9,611
    
    
    
    2,191
    
    
    
    578
    
    
    
    68,528Exchange adjustments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (21
    )
    
    
    (5
    )
    
    
    (26
    )Charge for the year
    
    
    11,340
    
    
    
    29,665
    
    
    
    5,680
    
    
    
    390
    
    
    
    331
    
    
    
    47,406Written back on disposals
    
    
    (603
    )
    
    
    (3,515
    )
    
    
    (598
    )
    
    
    (1,188
    )
    
    
    (224
    )
    
    
    (6,128
    )As at March 31, 2011
    
    
    25,771
    
    
    
    67,264
    
    
    
    14,693
    
    
    
    1,372
    
    
    
    680
    
    
    
    109,780Net book value:As at March 31, 2011
    
    
    110,963
    
    
    
    445,743
    
    
    
    15,911
    
    
    
    1,344
    
    
    
    1,285
    
    
    
    575,246
    F-30




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##### Table of Contents



Le Gaga Holdings Limited
Notes to the consolidated financial statements (continued)  (Expressed in Renminbi unless otherwise indicated)
 13
    
    Construction in progress
 2009
    
    
    2010
    
    
    2011RMB000
    
    
    RMB000
    
    
    RMB000At April 1
    
    
    26,709
    
    
    
    18,988
    
    
    
    17,402Additions
    
    
    125,730
    
    
    
    163,777
    
    
    
    276,319Transfer to property, plant and
equipment (note 12)
    
    
    (133,451
    )
    
    
    (165,363
    )
    
    
    (269,427
    )At March 31
    
    
    18,988
    
    
    
    17,402
    
    
    
    24,294
  14     Lease prepayments
 2009
    
    
    2010
    
    
    2011RMB000
    
    
    RMB000
    
    
    RMB000Cost:At April 1
    
    
    1,346
    
    
    
    2,828
    
    
    
    2,828Additions
    
    
    1,482
    
    
    
    
    
    
    
    At March 31
    
    
    2,828
    
    
    
    2,828
    
    
    
    2,828Accumulated amortization:At April 1
    
    
    121
    
    
    
    208
    
    
    
    312Charge for the year
    
    
    87
    
    
    
    104
    
    
    
    103At March 31
    
    
    208
    
    
    
    312
    
    
    
    415Net book value:At March 31
    
    
    2,620
    
    
    
    2,516
    
    
    
    2,413
   F-31




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##### Table of Contents



Le Gaga Holdings Limited
Notes to the consolidated financial statements (continued)  (Expressed in Renminbi unless otherwise indicated)
 15
    
    Long-term deposits and prepayments
  2009
    
    
    2010
    
    
    2011RMB000
    
    
    RMB000
    
    
    RMB000Deposits to wholesalers
    
    
    
    
    
    
    3,080
    
    
    
    3,080Construction works
    
    
    
    
    
    
    3,910
    
    
    
    3,440Prepaid utilities expenses
    
    
    2,532
    
    
    
    2,309
    
    
    
    2,058Prepaid pest control service costs
    
    
    11,558
    
    
    
    13,087
    
    
    
    11,755Prepaid environmental protection service costs
    
    
    7,448
    
    
    
    6,517
    
    
    
    15,564Prepaid land sanitation service costs
    
    
    
    
    
    
    
    
    
    
    18,739Prepaid front-end fee in connection with the
long-term bank loan
    
    
    
    
    
    
    1,189
    
    
    
    1,688Prepaid advertising and promotion expenses
    
    
    
    
    
    
    1,467
    
    
    
    66721,538
    
    
    
    31,559
    
    
    
    56,991
  16
    
    Principal subsidiaries
  Place anddate of
    
    Registeredestablishment/
    
    capital/issuedincorporation
    
    and fully paid up
    
    Ownership interestName of company
    
    and operation
    
    capital
    
    2009
    
    
    2010
    
    
    2011
    
    
    Principal activitiesChina Linong International Limited
    
    BVI/
    
    USD1,754
    
    
    100
    %
    
    
    100
    %
    
    
    100
    %
    
    Investment holdingHong KongMarch 24, 2006Land V. Group Limited
    
    BVI/
    
    USD50,000
    
    
    100
    %
    
    
    100
    %
    
    
    100
    %
    
    Investment holdingHong KongMarch 24, 2005Land V. Limited
    
    Hong Kong
    
    HK$100,000
    
    
    100
    %
    
    
    100
    %
    
    
    100
    %
    
    Sales of  agricultural productsOctober 31, 2001Hong Kong Linong Limited
    
    Hong Kong
    
    HK$100,000
    
    
    100
    %
    
    
    100
    %
    
    
    100
    %
    
    Sales of  agricultural productsNovember 10, 2006Linong Agriculture Technology (Shenzhen) Co. Limited
    
    The PRC
    
    HK$10,000,000
    
    
    100
    %
    
    
    100
    %
    
    
    100
    %
    
    Sales of  agricultural productsApril 23, 2004
  F-32




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##### Table of Contents



Le Gaga Holdings Limited
Notes to the consolidated financial statements (continued)  (Expressed in Renminbi unless otherwise indicated)
 16
    
    Principal subsidiaries (continued)
 Place anddate of
    
    Registeredestablishment/
    
    capital/issuedincorporation
    
    and fully paid up
    
    Ownership interestName of company
    
    and operation
    
    capital
    
    2009
    
    
    2010
    
    
    2011
    
    
    Principal activitiesLinong Agriculture Technology (Liaoyang) Co. Limited (note b)
    
    The PRC
    
    USD640,000
    
    
    100
    %
    
    
    100
    %
    
    
    100
    %
    
    Growing, processing and sales of 
agricultural productsJuly 7, 2004Land V. Limited (Fujian)
    
    The PRC
    
    HK$15,000,000
    
    
    100
    %
    
    
    100
    %
    
    
    100
    %
    
    Growing, processing and sales of 
agricultural productsJuly 23, 2004Land V. Limited (Tianjin) (note a)
    
    The PRC
    
    HK$3,000,000
    
    
    100
    %
    
    
    
    
    
    
    
    
    
    Growing, processing and sales of agricultural productsMay 16, 2005Land V. Limited (Zhangjiakou)
    
    The PRC
    
    HK$5,000,000
    
    
    100
    %
    
    
    100
    %
    
    
    100
    %
    
    Growing, processing and sales of agricultural productsOctober 18, 2006Linong Agriculture Technology (Shantou) Co. Limited
    
    The PRC
    
    USD$1,000,000
    
    
    100
    %
    
    
    100
    %
    
    
    100
    %
    
    Growing, processing and sales of 
agricultural productsMay 9, 2007Linong Agriculture Technology (Huizhou) Co. Limited
    
    The PRC
    
    HK$10,000,000
    
    
    100
    %
    
    
    100
    %
    
    
    100
    %
    
    Growing, processing and sales of agricultural productsDecember 28, 2006Xiamen Land V. Group Co. Limited
    
    The PRC
    
    USD1,000,000
    
    
    100
    %
    
    
    100
    %
    
    
    100
    %
    
    Growing, processing and sales of agricultural productsMarch 20, 2007Land V. Agriculture Technology (Ningde) Co. Limited
    
    The PRC
    
    USD2,100,000
    
    
    100
    %
    
    
    100
    %
    
    
    100
    %
    
    Growing, processing and sales of agricultural productsSeptember 22, 2008Fuzhou Land V. Group Co. Limited
    
    The PRC
    
    USD2,000,000
    
    
    100
    %
    
    
    100
    %
    
    
    100
    %
    
    Growing, processing and sales of agricultural productsJune 12, 2008Land V. Agriculture Technology (Zhangzhou) Co. Limited
    
    The PRC
    
    USD2,000,000
    
    
    100
    %
    
    
    100
    %
    
    
    100
    %
    
    Growing, processing and sales of agricultural productsJune 19, 2008
  F-33




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##### Table of Contents



Le Gaga Holdings Limited
Notes to the consolidated financial statements (continued)  (Expressed in Renminbi unless otherwise indicated)
 16
    
    Principal subsidiaries (continued)
 Place anddate of
    
    Registeredestablishment/
    
    capital/issuedincorporation
    
    and fully paid up
    
    Ownership interestName of company
    
    and operation
    
    capital
    
    2009
    
    
    2010
    
    
    2011
    
    
    Principal activitiesLiyuan Agriculture Technology (Quanzhou) Co. Limited
    
    The PRC
    
    RMB3,000,000
    
    
    
    
    
    
    100
    %
    
    
    100
    %
    
    Growing, processing and sales of 
agricultural productsOctober 26, 2009Liaoyang Liyuan Agricultural Products Co. Limited
    
    The PRC
    
    RMB3,000,000
    
    
    
    
    
    
    
    
    
    
    100
    %
    
    Growing, processing and sales of 
agricultural productsApril 28, 2010Putian Land V. Group Co. Limited
    
    The PRC
    
    USD10,000,000
    
    
    
    
    
    
    
    
    
    
    100
    %
    
    Growing, processing and sales of 
agricultural productsDecember 23, 2010
  (a)
    
    The Group disposed of Land V. Limited (Tianjin) during the year ended March 31, 2010 (see
note 27).(b)
    
    Linong Agricultural Technology (Liaoyang) Co. Limited is in the process of deregistration as
at March 31, 2011. 17
    
    Biological assets
  (a)
    
    Reconciliation of carrying amount of biological assets:
 2009
    
    
    2010
    
    
    2011RMB000
    
    
    RMB000
    
    
    RMB000At April 1
    
    
    26,684
    
    
    
    25,587
    
    
    
    50,191Changes in fair value less costs to sell
    
    
    97,343
    
    
    
    152,743
    
    
    
    241,896Plantation expenditure
    
    
    72,558
    
    
    
    100,478
    
    
    
    135,762Harvested crops transferred to inventories
    
    
    (170,998
    )
    
    
    (228,617
    )
    
    
    (348,138
    )At March 31
    
    
    25,587
    
    
    
    50,191
    
    
    
    79,711Non-current portion
    
    
    2,993
    
    
    
    5,186
    
    
    
    6,049Current portion
    
    
    22,594
    
    
    
    45,005
    
    
    
    73,662At March 31
    
    
    25,587
    
    
    
    50,191
    
    
    
    79,711
   F-34




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##### Table of Contents



Le Gaga Holdings Limited
Notes to the consolidated financial statements (continued)  (Expressed in Renminbi unless otherwise indicated)
 17
    
    Biological assets (continued)(b)
    
    The analysis of carrying amount of biological assets:
 2009Vegetables
    
    
    
    
    
    
    Tea andArea
    
    
    and fruits
    
    
    Area
    
    
    other trees
    
    
    Total(Mu)
    
    
    RMB000
    
    
    (Mu)
    
    
    RMB000
    
    
    RMB000Non-current
    
    
    
    
    
    
    
    
    
    
    1,150
    
    
    
    2,993
    
    
    
    2,993Current
    
    
    3,965
    
    
    
    22,594
    
    
    
    
    
    
    
    
    
    
    
    22,5943,965
    
    
    
    22,594
    
    
    
    1,150
    
    
    
    2,993
    
    
    
    25,587
 2010Vegetables
    
    
    
    
    
    
    Tea andArea
    
    
    and fruits
    
    
    Area
    
    
    other trees
    
    
    Total(Mu)
    
    
    RMB000
    
    
    (Mu)
    
    
    RMB000
    
    
    RMB000Non-current
    
    
    
    
    
    
    
    
    
    
    1,150
    
    
    
    5,186
    
    
    
    5,186Current
    
    
    6,833
    
    
    
    45,005
    
    
    
    
    
    
    
    
    
    
    
    45,0056,833
    
    
    
    45,005
    
    
    
    1,150
    
    
    
    5,186
    
    
    
    50,191
 2011Vegetables
    
    
    
    
    
    
    Tea andArea
    
    
    and fruits
    
    
    Area
    
    
    other trees
    
    
    Total(Mu)
    
    
    RMB000
    
    
    (Mu)
    
    
    RMB000
    
    
    RMB000Non-current
    
    
    
    
    
    
    
    
    
    
    1,150
    
    
    
    6,049
    
    
    
    6,049Current
    
    
    5,956
    
    
    
    73,662
    
    
    
    
    
    
    
    
    
    
    
    73,6625,956
    
    
    
    73,662
    
    
    
    1,150
    
    
    
    6,049
    
    
    
    79,711
     
    
    The present condition of a biological asset excludes any increases in value from additional biological
transformation and future activities of the Company such as those related to enhancing the future biological
transformation, harvesting and selling; and
    
    Estimated future net cash flows are referenced to past experience from the management and historical records.
  F-35




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##### Table of Contents



Le Gaga Holdings Limited
Notes to the consolidated financial statements (continued)  (Expressed in Renminbi unless otherwise indicated)
 
 17
    
    Biological assets (continued)(c)
    
    The quantity and amount of fair value less costs to sell of agricultural produce harvested
during the year:
 2009
    
    
    2010
    
    
    2011Quantity
    
    
    
    
    
    
    Quantity
    
    
    
    
    
    
    Quantity(tons)
    
    
    RMB000
    
    
    (tons)
    
    
    RMB000
    
    
    (tons)
    
    
    RMB000Vegetables and
fruits
    
    
    69,240
    
    
    
    170,998
    
    
    
    98,076
    
    
    
    228,617
    
    
    
    123,294
    
    
    
    348,138
 (d)
    
    Risks related to the Groups biological assets:Regulatory and environment risks
  Supply and demand risk
  Climate and other risks
  18
    
    Inventories
 (a)
    
    Inventories in the consolidated balance sheets comprise:
 2009
    
    
    2010
    
    
    2011RMB000
    
    
    RMB000
    
    
    RMB000Agricultural materials
    
    
    3,035
    
    
    
    2,759
    
    
    
    3,992Consumables and packing materials
    
    
    167
    
    
    
    179
    
    
    
    582Agricultural produce
    
    
    
    
    
    
    
    
    
    
    343,202
    
    
    
    2,938
    
    
    
    4,608
   F-36




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##### Table of Contents



Le Gaga Holdings Limited
Notes to the consolidated financial statements (continued)  (Expressed in Renminbi unless otherwise indicated)
 18
    
    Inventories(b)
    
    Reconciliation of carrying amount of agricultural produce:
 2009
    
    
    2010
    
    
    2011RMB000
    
    
    RMB000
    
    
    RMB000At April 1
    
    
    730
    
    
    
    
    
    
    
    Harvested crops transferred in
from biological assets
    
    
    170,998
    
    
    
    228,617
    
    
    
    348,138Purchases during the year
    
    
    2,560
    
    
    
    9,660
    
    
    
    9,107Cost of inventories sold
    
    
    (174,288
    )
    
    
    (238,277
    )
    
    
    (357,211
    )At March 31
    
    
    
    
    
    
    
    
    
    
    34
 (c)
 2009
    
    
    2010
    
    
    2011RMB000
    
    
    RMB000
    
    
    RMB000Purchases of agricultural produce
    
    
    2,560
    
    
    
    9,660
    
    
    
    9,073Plantation expenditure
    
    
    73,101
    
    
    
    92,905
    
    
    
    129,790Biological assets fair value adjustments
    
    
    98,627
    
    
    
    135,712
    
    
    
    218,348Cost of inventories sold
    
    
    174,288
    
    
    
    238,277
    
    
    
    357,211
 19
    
    Trade and other receivables
 2009
    
    
    2010
    
    
    2011RMB000
    
    
    RMB000
    
    
    RMB000Trade receivables
    
    
    11,544
    
    
    
    19,595
    
    
    
    40,131Other receivables, deposits and prepayments
    
    
    10,113
    
    
    
    17,184
    
    
    
    22,86921,657
    
    
    
    36,779
    
    
    
    63,000
    F-37




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##### Table of Contents



Le Gaga Holdings Limited
Notes to the consolidated financial statements (continued)  (Expressed in Renminbi unless otherwise indicated)
 19
    
    Trade and other receivables (continued)(a)
    
    Impairment of trade receivables
  The movement in the allowance for doubtful debts during the year is as follows:
 2009
    
    
    2010
    
    
    2011RMB000
    
    
    RMB000
    
    
    RMB000At April 1
    
    
    806
    
    
    
    
    
    
    
    Impairment loss recognized
    
    
    
    
    
    
    
    
    
    
    Uncollectible amounts written off
    
    
    (806
    )
    
    
    
    
    
    
    At March 31
    
    
    
    
    
    
    
    
    
    
    
  (b)
    
    Trade receivables that are not impaired
  2009
    
    
    2010
    
    
    2011RMB000
    
    
    RMB000
    
    
    RMB000Neither past due nor impaired
    
    
    11,504
    
    
    
    18,823
    
    
    
    40,001Less than 1 month past due
    
    
    
    
    
    
    577
    
    
    
    1 to 3 months past due
    
    
    
    
    
    
    195
    
    
    
    6 to 12 months past due
    
    
    
    
    
    
    
    
    
    
    1301 to 2 years past due
    
    
    40
    
    
    
    
    
    
    
    40
    
    
    
    772
    
    
    
    13011,544
    
    
    
    19,595
    
    
    
    40,131
    F-38




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##### Table of Contents



Le Gaga Holdings Limited
Notes to the consolidated financial statements (continued)  (Expressed in Renminbi unless otherwise indicated)
 20
    
    Cash
  2009
    
    
    2010
    
    
    2011RMB000
    
    
    RMB000
    
    
    RMB000Cash at bank
    
    
    91,014
    
    
    
    116,347
    
    
    
    564,069Cash in hand
    
    
    16,925
    
    
    
    22,860
    
    
    
    34,653107,939
    
    
    
    139,207
    
    
    
    598,722
  21
    
    Bank loan
 2009
    
    
    2010
    
    
    2011RMB000
    
    
    RMB000
    
    
    RMB000Non-current liabilitiesBank loan
    
    
    
    
    
    
    34,290
    
    
    
    78,835Current liabilitiesBank loan
    
    
    
    
    
    
    
    
    
    
    6,000
    
    
    
    34,290
    
    
    
    84,835
 (a)
    
    Non-current bank loan
  (i)
    
    Repayment terms and interest rates
     F-39




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##### Table of Contents



Le Gaga Holdings Limited
Notes to the consolidated financial statements (continued)  (Expressed in Renminbi unless otherwise indicated)
 21
    
    Bank loan (continued)(a)
    
    Non-current bank loan (continued)(ii)
    
    Conversion right
   
    
    DEG shall have the right, but not the obligation, to
subscribe for new ordinary or preferred shares (as the case
may be) in China Linong at the same price and on the same
payment terms (other than the manner of payment of the
subscription price) as the other subscribers in the Pre-IPO
Financing are subscribing by converting up to an aggregate
amount of US$5,000,000 outstanding under the Loan;
    
    If the Loan has been repaid in full prior to such Pre-IPO
Financing, DEG shall have the right, but not the obligation,
to subscribe for new ordinary or preferred shares (as the case
may be) in China Linong at the same price and on the same
payment terms as the other subscribers in the Pre-IPO
Financing are subscribing in the aggregate amount of up to
US$5,000,000.
    
    If the Loan has been repaid to the extent that the amount
outstanding under the Loan is less than US$5,000,000, DEG
shall have the right, but not the obligation, to subscribe for
new ordinary or preferred shares in China Linong at the same
price and on the same payment terms (other than the manner of
payment of the subscription price) as the other subscribers in
the Pre-IPO Financing are subscribing in the aggregate amount
of up to US$5,000,000, by converting the amount outstanding
under the Loan and by paying the balance of the subscription
price on the same payment terms as the other subscribers in
the Pre-IPO Financing are subscribing.
    
    In the event that DEG decides to exercise its right to
subscribe for new ordinary or preferred shares (as the case
may be) in China Linong pursuant to any Pre-IPO Financing, the
shares to be issued shall rank pari passu with all the other
shares to be issued to the other subscribers in such Pre-IPO
Financing.
    
    In the event that DEG decides to exercise its right to
subscribe for new ordinary or preferred shares (as the case
may be) in China Linong pursuant to any Pre-IPO Financing by
converting any amount outstanding under the Loan, the amount
so converted shall be deemed to be a repayment under the Loan
Agreement and shall reduce the repayment installments in
inverse order of maturity.
    F-40




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##### Table of Contents



Le Gaga Holdings Limited
Notes to the consolidated financial statements (continued)  (Expressed in Renminbi unless otherwise indicated)
 21
    
    Bank loan (continued)(a)
    
    Non-current bank loan (continued)(ii)
    
    Conversion right (continued)
  (iii)
    
    Prepayment option
   (iv)
    
    Share retention and financial covenants
  (b)
    
    Current bank loan
  22
    
    Loan from municipal government
 2009
    
    
    2010
    
    
    2011RMB000
    
    
    RMB000
    
    
    RMB000Long-term municipal government loan
    
    
    1,000
    
    
    
    1,410
    
    
    
    
   F-41




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##### Table of Contents



Le Gaga Holdings Limited
Notes to the consolidated financial statements (continued)  (Expressed in Renminbi unless otherwise indicated)
 23
    
    Trade and other payables
 2009
    
    
    2010
    
    
    2011RMB000
    
    
    RMB000
    
    
    RMB000Trade creditors
    
    
    2,711
    
    
    
    4,508
    
    
    
    8,214Other creditors and accrued charges
    
    
    9,014
    
    
    
    14,080
    
    
    
    28,107Amount due to a director
    
    
    41
    
    
    
    40
    
    
    
    11,766
    
    
    
    18,628
    
    
    
    36,321
 All of the trade and other payables (including amount due to a director) are expected to be settled within one year.Amount due to a director is unsecured, interest-free and repayable on demand.
 24
    
    Equity settled share-based transactions
      F-42




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##### Table of Contents



Le Gaga Holdings Limited
Notes to the consolidated financial statements (continued)  (Expressed in Renminbi unless otherwise indicated)
 24
    
    Equity settled share-based transactions (continued)(a)
    
    The terms and conditions of the grants are as follows:
 VestingconditionsNumber of share options
    
    
    (from the date
    
    
    ContractualDirectors
    
    
    Consultants
    
    
    Employees
    
    
    Total
    
    
    of grant)
    
    termGranted on
May 23, 200715,526,667
    
    
    
    
    
    
    
    6,700,000
    
    
    
    22,226,667
    
    
    One year
    
    10 years15,526,667
    
    
    
    
    
    
    
    6,700,000
    
    
    
    22,226,667
    
    
    Two years
    
    10 years15,526,666
    
    
    
    
    
    
    
    6,600,000
    
    
    
    22,126,666
    
    
    Three years
    
    10 years46,580,000
    
    
    
    
    
    
    
    20,000,000
    
    
    
    66,580,000Granted on
April 17, 20098,748,667
    
    
    
    5,666,667
    
    
    
    1,666,667
    
    
    
    16,082,001
    
    
    One year
    
    10 years8,748,667
    
    
    
    5,666,667
    
    
    
    1,666,667
    
    
    
    16,082,001
    
    
    Two years
    
    10 years8,748,666
    
    
    
    5,666,666
    
    
    
    1,666,666
    
    
    
    16,081,998
    
    
    Three years
    
    10 years26,246,000
    
    
    
    17,000,000
    
    
    
    5,000,000
    
    
    
    48,246,000
 VestingconditionsNumber of share options
    
    
    (from the date
    
    
    ContractualDirectors
    
    
    Consultants
    
    
    Employees
    
    
    Total
    
    
    of grant)
    
    conditionsGranted on
March 29, 201014,394,667
    
    
    
    6,000,000
    
    
    
    14,000,000
    
    
    
    34,394,667
    
    
    One year
    
    10 years14,394,667
    
    
    
    6,000,000
    
    
    
    14,000,000
    
    
    
    34,394,667
    
    
    Two years
    
    10 years14,394,666
    
    
    
    6,000,000
    
    
    
    14,000,000
    
    
    
    34,394,666
    
    
    Three years
    
    10 years43,184,000
    
    
    
    18,000,000
    
    
    
    42,000,000
    
    
    
    103,184,000Granted on
August 31, 20105,600,000
    
    
    
    1,800,000
    
    
    
    12,600,000
    
    
    
    20,000,000
    
    
    One year
    
    10 years5,600,000
    
    
    
    1,800,000
    
    
    
    12,600,000
    
    
    
    20,000,000
    
    
    Two years
    
    10 years5,600,000
    
    
    
    1,800,000
    
    
    
    12,600,000
    
    
    
    20,000,000
    
    
    Three years
    
    10 years16,800,000
    
    
    
    5,400,000
    
    
    
    37,800,000
    
    
    
    60,000,000
  F-43




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##### Table of Contents



Le Gaga Holdings Limited
Notes to the consolidated financial statements (continued)  (Expressed in Renminbi unless otherwise indicated)
 24
    
    Equity settled share-based transactions (continued)(b)
    
    The number and weighted average exercise price of share options are as follows:
 2009
    
    
    2010
    
    
    2011Weighted
    
    
    
    
    
    
    Weighted
    
    
    
    
    
    
    Weightedaverage
    
    
    
    
    
    
    average
    
    
    
    
    
    
    averageexercise
    
    
    Number of
    
    
    exercise
    
    
    Number of
    
    
    exercise
    
    
    Number ofprice
    
    
    options
    
    
    price
    
    
    options
    
    
    price
    
    
    optionsUSD
    
    
    
    
    
    USD
    
    
    
    
    
    USDOutstanding at April 1
    
    
    0.035402
    
    
    
    66,580,000
    
    
    
    0.035402
    
    
    
    66,580,000
    
    
    
    0.062780
    
    
    
    218,010,000Exercised during the year
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    0.041538
    
    
    
    (79,593,999
    )Forfeited during the year
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    0.08
    
    
    
    (900,000
    )Granted during the year
    
    
    
    
    
    
    
    
    
    
    0.074817
    
    
    
    151,430,000
    
    
    
    0.08
    
    
    
    60,000,000Outstanding at March 31
    
    
    0.035402
    
    
    
    66,580,000
    
    
    
    0.062780
    
    
    
    218,010,000
    
    
    
    0.076493
    
    
    
    197,516,001Exercisable at March 31
    
    
    0.035402
    
    
    
    22,230,000
    
    
    
    0.035402
    
    
    
    44,460,000
    
    
    
    0.075473
    
    
    
    37,462,668
   (c)
    
    Fair value of share options and assumptions
   F-44




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##### Table of Contents



Le Gaga Holdings Limited
Notes to the consolidated financial statements (continued)  (Expressed in Renminbi unless otherwise indicated)
 24
    
    Equity settled share-based transactions (continued)(c)
    
    Fair value of share options and assumptions (continued)
 At April 17, 2009
    
    
    At March 29, 2010
    
    
    At August 31, 2010(date of grant)
    
    
    (date of grant)
    
    
    (date of grant)Fair value at measurement date
    
    US$
    0.02035  US$0.02385
    
    
    US$
    0.02912  US$0.03209
    
    
    US$
    0.04571  US$0.04862Share price
    

    US$ 0.05015
    
    

    US$ 0.06061
    
    

    US$ 0.083Exercise price
    

    US$ 0.07293
    
    

    US$ 0.07570
    
    

    US$ 0.080Expected volatility
(expressed as average
volatility used in the
modelling under the
Black-Scholes Option Pricing
model)
    

    51.30%  53.70%
    
    

    56.90%
    
    

    57.60%  58.70%Option life (expressed as
weighted average life used in
the modelling under the
Black-Scholes Option Pricing
model)
    
    5.5  6.5 years
    
    
    5.5  6.5 years
    
    
    5.5  6.5 yearsExpected dividends
    
    
    
   
    
    
    
    Risk-free interest rate
(based on USD China
Sovereignty Bond Rate)
    

    3.75%  3.90%
    
    

    2.96%  3.26%
    
    

    2.51%  2.75%
   25
    
    Income tax in the consolidated balance sheets(a)
    
    Current taxation in the consolidated balance sheets represents:
 2009
    
    
    2010
    
    
    2011RMB000
    
    
    RMB000
    
    
    RMB000Provision for PRC income/withholding tax
for the year
    
    
    200
    
    
    
    890
    
    
    
    Balance in respect of prior years
    
    
    2,992
    
    
    
    3,192
    
    
    
    4,0823,192
    
    
    
    4,082
    
    
    
    4,082
  F-45




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##### Table of Contents



Le Gaga Holdings Limited
Notes to the consolidated financial statements (continued)  (Expressed in Renminbi unless otherwise indicated)
 25
    
    Income tax in the consolidated balance sheets (continued)(b)
    
    Deferred tax assets not recognized
  (c)
    
    Deferred tax liabilities not recognized
  26
    
    Equity
 (a)
    
    Share capital(i)
    
    Share capital of the Company
      F-46




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##### Table of Contents



Le Gaga Holdings Limited
Notes to the consolidated financial statements (continued)  (Expressed in Renminbi unless otherwise indicated)
 26
    
    Equity (continued)(a)
    
    Share capital (continued)(i)
    
    Share capital of the Company (continued)
 2011Number ofshares
    
    
    AmountRMB000Authorized:Ordinary shares of US$0.01 each
    
    
    5,000,000,000
    
    
    
    338,590Preferred shares of US$0.01 each
    
    
    
    
    
    
    Issued:Ordinary shares:At April 1
    
    
    
    
    
    
    Issue of ordinary shares upon incorporation
    
    
    1
    
    
    
    Issue of ordinary shares upon the Reorganization
    
    
    1,050,000,000
    
    
    
    71,104Exercise of share option
    
    
    79,593,999
    
    
    
    5,383Issue of ordinary shares upon the IPO
    
    
    460,000,000
    
    
    
    30,778Automatic conversion
of preferred shares into
ordinary shares upon the IPO
    
    
    703,997,000
    
    
    
    47,673At March 31
    
    
    2,293,591,000
    
    
    
    154,938Preferred shares:At April 1
    
    
    
    
    
    
    Issue of preferred shares upon the Reorganization
    
    
    703,997,000
    
    
    
    47,673Automatic conversion of preferred shares to ordinary shares upon the IPO
    
    
    (703,997,000
    )
    
    
    (47,673
    )At March 31
    
    
    
    
    
    
    
  F-47




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##### Table of Contents



Le Gaga Holdings Limited
Notes to the consolidated financial statements (continued)  (Expressed in Renminbi unless otherwise indicated)
 26
    
    Equity (continued)(a)
    
    Share capital (continued)(ii)
    
    Share capital of China Linong
  2009
    
    
    2010
    
    
    2011Number of
    
    
    
    
    
    
    Number of
    
    
    
    
    
    
    Number ofshares
    
    
    Amount
    
    
    shares
    
    
    Amount
    
    
    shares
    
    
    AmountRMB000
    
    
    
    
    
    RMB000
    
    
    
    
    
    RMB000Authorized:Ordinary shares of US$0.001 each
    
    
    1,050,000
    
    
    
    9
    
    
    
    1,050,000
    
    
    
    9
    
    
    
    50,703,997
    
    
    
    406Preferred shares of US$0.001 each
    
    
    624,870
    
    
    
    5
    
    
    
    703,997
    
    
    
    6
    
    
    
    
    
    
    
    Issued:Ordinary shares:At April 1
    
    
    1,050
    
    
    
    9
    
    
    
    1,050,000
    
    
    
    9
    
    
    
    1,050,000
    
    
    
    9Effect of share subdivision from
US$1 each to US$0.001 each
    
    
    1,048,950
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Re-designation of preferred shares
to ordinary shares
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    703,997
    
    
    
    6At March 31
    
    
    1,050,000
    
    
    
    9
    
    
    
    1,050,000
    
    
    
    9
    
    
    
    1,753,997
    
    
    
    15Preferred shares:At April 1
    
    
    624,870
    
    
    
    5
    
    
    
    624,870
    
    
    
    5
    
    
    
    703,997
    
    
    
    6Re-designation of preferred shares
to ordinary shares
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (703,997
    )
    
    
    (6
    )Issue of Series B1 Preferred Shares
    
    
    
    
    
    
    
    
    
    
    79,127
    
    
    
    1
    
    
    
    
    
    
    
    At March 31
    
    
    624,870
    
    
    
    5
    
    
    
    703,997
    
    
    
    6
    
    
    
    
    
    
    
    
 (iii)
    
    Ordinary shares
   F-48




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##### Table of Contents



Le Gaga Holdings Limited
Notes to the consolidated financial statements (continued)  (Expressed in Renminbi unless otherwise indicated)
 26
    
    Equity (continued)(a)
    
    Share capital (continued)(iv)
    
    Preferred shares
     The rights of the preferred shareholders to convert the shares into ordinary shares are summarized as follows:
    
    Conversion rights are exercisable at any time at the preferred shareholders option, to convert all or any
portion of preferred shares into ordinary shares of the Company unless
automatically converted as described below.
    
    The initial conversion price for each class of preferred shares is the issue price subject to adjustments from
time to time in the event of any share splits, share combinations, share dividends, recapitalizations and similar
events.
    
    The Series A Preferred Shares and Series A1 Preferred Shares would automatically be converted into ordinary
shares, at the then applicable conversion price, upon
 (1)
    
    the date specified by written consent or agreement of the holders of at least 50%
of the Series A Preferred Shares and Series A1 Preferred Shares outstanding, or(2)
    
    the closing of an underwritten public offering of ordinary shares of the
Company in the United States of America with gross proceeds to the Company in excess of
US$70,000,000 and a pre-public offering market capitalization of at least
US$300,000,000, or in a similar public offering of the ordinary shares of the Company
in another jurisdiction which results in the ordinary shares trading publicly on a
recognized regional or national securities exchange (Qualified Public Offering).
 
    
    The Series B Preferred Shares and Series B1 Preferred
Shares would automatically be converted into ordinary shares,
at the then applicable conversion price, upon the closing of a
Qualified Public Offering.
    
    No fractional ordinary share would be issued upon
conversion of the preferred shares. In lieu of any fractional
shares to which the holder would otherwise be entitled, the
Company would pay cash equal to such fraction multiplied by
the then effective respective conversion price.
  F-49




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##### Table of Contents



Le Gaga Holdings Limited
Notes to the consolidated financial statements (continued)  (Expressed in Renminbi unless otherwise indicated)
 26
    
    Equity (continued)(b)
    
    Nature and purpose of reserves(i)
    
    Share premium
  (ii)
    
    Statutory reserve
     (iii)
    
    Exchange reserve
  (iv)
    
    Capital reserve
  (v)
    
    Other reserve
 (1)
    
    Under the 2006 Reorganization, China Linong acquired the entire equity interest
in Land V. Group Limited by issuing 1,050 new ordinary shares as consideration. The
difference between the carrying amount of share capital and share premium of Land V.
Group Limited and the nominal value of the share issued by China Linong was credited to
other reserve.
 (2)
    
    Under the Reorganization, the Company issued ordinary shares and preferred shares
to the then ordinary shareholders and preferred shareholders of China Linong in exchange
for all outstanding ordinary shares and preferred shares of China Linong at a
1,000-for-1 exchange ratio. The difference between the carrying amount of share capital
and share premium of China Linong and the nominal value of the shares issued by the
Company was credited to other reserve.
 (c)
    
    Capital management
   F-50




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##### Table of Contents



Le Gaga Holdings Limited
Notes to the consolidated financial statements (continued)  (Expressed in Renminbi unless otherwise indicated)
 26
    
    Equity (continued)(c)
    
    Capital management (continued)
    27
    
    Disposal of subsidiaries
 (a)
    
    Disposal of Land V. Limited (Weifang) and Land V. Limited (Hangzhou)
  Net assets disposed of at the date of disposal:
 RMB000Property, plant and equipment
    
    
    172Trade and other receivables
    
    
    11,078Inventory
    
    
    145Trade and other payables
    
    
    (3
    )Cash and cash equivalents
    
    
    23Net assets disposed of
    
    
    11,415Satisfied by wavier of amounts due to the Subsidiaries
by other entities within the Group
    
    
    (11,016
    )Release of exchange reserve upon disposal of the Subsidiaries
    
    
    (1,529
    )Gain on disposal of subsidiaries
    
    
    (1,130
    )
  F-51




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##### Table of Contents



Le Gaga Holdings Limited
Notes to the consolidated financial statements (continued)  (Expressed in Renminbi unless otherwise indicated)
 27
    
    Disposal of subsidiaries (continued)(b)
    
    Disposal of Land V. Limited (Tianjin)
  Net assets disposed of at the date of disposal:
 RMB000Trade and other receivables
    
    
    6,005Net assets disposed of
    
    
    6,005Satisfied by wavier of amounts due to the subsidiary
by other entities within the Group
    
    
    (6,004
    )Release of exchange reserve upon disposal of the subsidiary
    
    
    (541
    )Gain on disposal of subsidiary
    
    
    (540
    )
 28
    
    Financial risk management and fair values
  (a)
    
    Credit risk
       F-52




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##### Table of Contents



Le Gaga Holdings Limited
Notes to the consolidated financial statements (continued)  (Expressed in Renminbi unless otherwise indicated)
 28
    
    Financial risk management and fair values (continued)(b)
    
    Currency risk(i)
    
    Forecast transactions
  (ii)
    
    Exposure to currency risk
  2009 (expressed in Renminbi)Hong Kong
    
    
    United Statesdollars
    
    
    dollars
    
    
    Renminbi000
    
    
    000
    
    
    000Trade and other receivables
    
    
    7,394
    
    
    
    
    
    
    
    13,063Cash and cash equivalents
    
    
    4,290
    
    
    
    6,886
    
    
    
    Trade and other payables
    
    
    (8,670
    )
    
    
    (63,263
    )
    
    
    Net exposure arising from
recognized assets and
liabilities
    
    
    3,014
    
    
    
    (56,377
    )
    
    
    13,063
 2010 (expressed in Renminbi)Hong Kong
    
    
    United Statesdollars
    
    
    dollars
    
    
    Renminbi000
    
    
    000
    
    
    000Trade and other receivables
    
    
    7,370
    
    
    
    
    
    
    
    42,553Cash and cash equivalents
    
    
    7,667
    
    
    
    20,992
    
    
    
    Trade and other payables
    
    
    (20,568
    )
    
    
    (70,419
    )
    
    
    Net exposure arising from
recognized assets and
liabilities
    
    
    (5,531
    )
    
    
    (49,427
    )
    
    
    42,553
 2011 (expressed in Renminbi)Hong Kong
    
    
    United Statesdollars
    
    
    dollars
    
    
    Renminbi000
    
    
    000
    
    
    000Trade and other receivables
    
    
    19,363
    
    
    
    
    
    
    
    52,880Cash and cash equivalents
    
    
    9,849
    
    
    
    24,271
    
    
    
    98,567Trade and other payables
    
    
    (21,506
    )
    
    
    (175,388
    )
    
    
    (3,036
    )Net exposure arising from
recognized assets and
liabilities
    
    
    7,706
    
    
    
    (151,117
    )
    
    
    148,411
  F-53




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##### Table of Contents



Le Gaga Holdings Limited
Notes to the consolidated financial statements (continued)  (Expressed in Renminbi unless otherwise indicated)
 28
    
    Financial risk management and fair values (continued)(b)
    
    Currency risk (continued)(iii)
    
    Sensitivity analysis
  2009
    
    
    2010
    
    
    2011Increase/
    
    
    
    
    
    
    Increase/
    
    
    
    
    
    
    Increase/(decrease)
    
    
    Increase/
    
    
    (decrease)
    
    
    Increase/
    
    
    (decrease)
    
    
    Increase/in foreign
    
    
    (decrease)
    
    
    in foreign
    
    
    (decrease)
    
    
    in foreign
    
    
    (decrease)exchange
    
    
    in profit
    
    
    exchange
    
    
    in profit
    
    
    exchange
    
    
    in profitrates
    
    
    after tax
    
    
    rates
    
    
    after tax
    
    
    rates
    
    
    after tax000
    
    
    
    
    
    000
    
    
    
    
    
    000Renminbi (note a)
    
    
    5
    %
    
    
    653
    
    
    
    5
    %
    
    
    2,128
    
    
    
    5
    %
    
    
    7,421(5
    %)
    
    
    (653
    )
    
    
    (5
    %)
    
    
    (2,128
    )
    
    
    (5
    %)
    
    
    (7,421
    )Hong Kong
    
    
    5
    %
    
    
    (397
    )
    
    
    5
    %
    
    
    (948
    )
    
    
    5
    %
    
    
    (928
    )Dollars (note b)
    
    
    (5
    %)
    
    
    397
    
    
    
    (5
    %)
    
    
    948
    
    
    
    (5
    %)
    
    
    928United States
    
    
    5
    %
    
    
    (184
    )
    
    
    5
    %
    
    
    865
    
    
    
    5
    %
    
    
    (1,258
    )Dollars (note b)
    
    
    (5
    %)
    
    
    184
    
    
    
    (5
    %)
    
    
    (865
    )
    
    
    (5
    %)
    
    
    1,258
    (a)
    
    Arising from subsidiaries outside the PRC-mainland whose functional currency is Hong Kong
dollars.(b)
    
    Arising from PRC subsidiaries whose functional currency is RMB.  F-54




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##### Table of Contents



Le Gaga Holdings Limited
Notes to the consolidated financial statements (continued)  (Expressed in Renminbi unless otherwise indicated)
 28     Financial risk management and fair values (continued)(c)
    
    Liquidity risk
   Contractual undiscounted cash outflowMore than
    
    
    More than1 year but
    
    
    2 years but
    
    
    
    
    
    
    Balance sheetWithin 1 year
    
    
    less than
    
    
    less than
    
    
    
    
    
    
    carryingor on demand
    
    
    2 years
    
    
    5 years
    
    
    Total
    
    
    amountRMB000
    
    
    RMB000
    
    
    RMB000
    
    
    RMB000
    
    
    RMB0002009Trade and other
payables
    
    
    11,766
    
    
    
    
    
    
    
    
    
    
    
    11,766
    
    
    
    11,766Loan from municipal
government
    
    
    
    
    
    
    
    
    
    
    1,108
    
    
    
    1,108
    
    
    
    1,00011,766
    
    
    
    
    
    
    
    1,108
    
    
    
    12,874
    
    
    
    12,766
 Contractual undiscounted cash outflowMore than
    
    
    More than1 year but
    
    
    2 years but
    
    
    
    
    
    
    Balance sheetWithin 1 year
    
    
    less than
    
    
    less than
    
    
    
    
    
    
    carryingor on demand
    
    
    2 years
    
    
    5 years
    
    
    Total
    
    
    amountRMB000
    
    
    RMB000
    
    
    RMB000
    
    
    RMB000
    
    
    RMB0002010Trade and other
payables
    
    
    18,628
    
    
    
    
    
    
    
    
    
    
    
    18,628
    
    
    
    18,628Bank loan
    
    
    4,657
    
    
    
    4,657
    
    
    
    41,991
    
    
    
    51,305
    
    
    
    34,290Loan from municipal
government
    
    
    
    
    
    
    778
    
    
    
    784
    
    
    
    1,562
    
    
    
    1,41023,285
    
    
    
    5,435
    
    
    
    42,775
    
    
    
    71,495
    
    
    
    54,328
  F-55




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##### Table of Contents



Le Gaga Holdings Limited
Notes to the consolidated financial statements (continued)  (Expressed in Renminbi unless otherwise indicated)
 28
    
    Financial risk management and fair values (continued)(c)
    
    Liquidity risk (continued)
 Contractual undiscounted
cash outflowMore than
    
    
    More than1 year but
    
    
    2 years but
    
    
    
    
    
    
    Balance sheetWithin 1 year
    
    
    less than
    
    
    less than
    
    
    
    
    
    
    carryingor on demand
    
    
    2 years
    
    
    5 years
    
    
    Total
    
    
    amountRMB000
    
    
    RMB000
    
    
    RMB000
    
    
    RMB000
    
    
    RMB0002011Trade and other
payables
    
    
    36,321
    
    
    
    
    
    
    
    
    
    
    
    36,321
    
    
    
    36,321Bank loans
    
    
    16,735
    
    
    
    10,359
    
    
    
    91,380
    
    
    
    118,474
    
    
    
    84,83553,056
    
    
    
    10,359
    
    
    
    91,380
    
    
    
    154,795
    
    
    
    121,156
 (d)
    
    Nature risk
  (e)
    
    Price risk
  (f)
    
    Fair values
    F-56




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##### Table of Contents



Le Gaga Holdings Limited
Notes to the consolidated financial statements (continued)  (Expressed in Renminbi unless otherwise indicated)
 29
    
    Material related party transactions
 (a)
 Name of party
    
    RelationshipMa Shing Yung
    
    Chairman and Chief Executive Officer of the Company and China LinongLui Ming Ho
    
    Director of China LinongNew Oriental Group Limited (New Oriental)
    
    An entity controlled by Luan Li, a former director of China Linong
 (b)
 2009
    
    
    2010
    
    
    2011RMB000
    
    
    RMB000
    
    
    RMB000Amount due to a director  Ma Shing YungAt April 1
    
    
    14,723
    
    
    
    41
    
    
    
    40Exchange adjustments
    
    
    (214
    )
    
    
    (1
    )
    
    
    Advance from Ma Shing Yung
    
    
    58
    
    
    
    
    
    
    
    Repayment to Ma Shing Yung
    
    
    (14,526
    )
    
    
    
    
    
    
    (40
    )At March 31 (note 23)
    
    
    41
    
    
    
    40
    
    
    
    Amount due from a director of China Linong  Lui Ming HoAt April 1
    
    
    131
    
    
    
    48
    
    
    
    46Exchange adjustments
    
    
    (3
    )
    
    
    (1
    )
    
    
    Advance to Lui Ming Ho
    
    
    3
    
    
    
    2
    
    
    
    Repayment from Lui Ming Ho
    
    
    (83
    )
    
    
    (3
    )
    
    
    (46
    )At March 31 (note 19)
    
    
    48
    
    
    
    46
    
    
    
    
     F-57




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##### Table of Contents



Le Gaga Holdings Limited
Notes to the consolidated financial statements (continued)  (Expressed in Renminbi unless otherwise indicated)
 29
    
    Material related party transactions (continued)(b)
    
    (continued)(iii)
    
    Remuneration for key management personnel of the Group is as follows:
 2009
    
    
    2010
    
    
    2011RMB000
    
    
    RMB000
    
    
    RMB000Basic salaries, allowances and benefits
in kind
    
    
    1,283
    
    
    
    2,462
    
    
    
    5,501Equity settled share-based payment expenses
    
    
    3,140
    
    
    
    4,096
    
    
    
    15,7324,423
    
    
    
    6,558
    
    
    
    21,233
  30
    
    Commitments and contingent liabilities
 (a)
    
    Capital commitments
  2009
    
    
    2010
    
    
    2011RMB000
    
    
    RMB000
    
    
    RMB000Contracted for
    
    
    2,983
    
    
    
    30,268
    
    
    
    46,188Authorized but not contracted for
    
    
    234,050
    
    
    
    136,313
    
    
    
    172,363237,033
    
    
    
    166,581
    
    
    
    218,551
 (b)
    
    Operating lease commitments  2009
    
    
    2010
    
    
    2011RMB000
    
    
    RMB000
    
    
    RMB000Within 1 year
    
    
    8,133
    
    
    
    7,343
    
    
    
    10,592After 1 year but within 5 years
    
    
    28,933
    
    
    
    32,486
    
    
    
    44,607After 5 years
    
    
    18,334
    
    
    
    70,103
    
    
    
    106,95555,400
    
    
    
    109,932
    
    
    
    162,154
   F-58




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##### Table of Contents



Le Gaga Holdings Limited
Notes to the consolidated financial statements (continued)  (Expressed in Renminbi unless otherwise indicated)
 30
    
    Commitments and contingent liabilities (continued)(c)
    
    Environmental contingencies
  31
    
    Accounting estimates and judgements
  (a)
    
    Depreciation and estimated useful lives
  (b)
    
    Write-down of inventories
  (c)
    
    Impairment of assets
  (d)
    
    Fair value of biological assets and agricultural produce
    F-59




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##### Table of Contents



Le Gaga Holdings Limited
Notes to the consolidated financial statements (continued)  (Expressed in Renminbi unless otherwise indicated)
 32
    
    Possible impact of amendments, new standards and interpretations issued but not yet effective
for the year ended March 31, 2011
  Effective foraccounting periodsbeginning on or afterIFRS 9, Financial instruments
    
    January 1, 2013Improvements to IFRSs 2010
    
    July 1, 2010or January 1, 2011Revised IAS 24, Related party disclosures
    
    January 1, 2011
   F-60